AUD/CHF - Break above the neckline resistance at 0.7570 calls for rally to 0.8783
I don't normally follow this cross (the last time I made an analysis on AUD/CHF you can see by clicking here), but was asked to look at it and thought it could be a nice challenge.
When I did my last analysis way back in early August 2013, I labeled the decline to 0.8260 wave 3. This was a pretty accurate and, we have since seen both wave 4 and 5 develop to complete wave C at 0.6533. The rally of the 0.6533 low does look constructive and when (not if) the neckline resistance (the red line) breaks, that would call for a rally to the top of wave 4 at 0.8740. This also marks the point where wave 3 will be 200% the length of wave 1.
Short term, support at 0.7486 likely will act as a floor for the break above the neckline resistance, but only a break below support at 0.7383 will delay the expected rally for a move closer to 0.7240 and the up again. The odds for break below 0.7486 is very slim, but can't be excluded yet.
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