FX.co ★ USD/CHF Wave Analysis for August 8,2012

USD/CHF Elliott Wave
For the last few days the USD/CHF pair was trading in a downward move developing motive wave 1 (coloured blue) of the bigger (3) wave (coloured green). During the early European session we could observe a strong descending movement towards the 0.9657 level and we can regard this move as the end of the 1 wave (coloured blue). Therefore, during the early New York session this major pair did not manage to hold this level and the price started pushing higher when the development of the corrective 2 wave (coloured blue) started. In accordance with our wave rules and taking into account that the wave 2 retraces 61.8% of the wave 1, we can define the potential targets with Fibonacci retracement (0.9897-0.9657) with Take Profit 1 at 0.9777 (50% of wave 1) and Take Profit 2 at 0.9805 (61.8% of wave 1). To reduce the risk, we can use support at 0.9660 as Stop Loss. Also it is necessary to monitor the Swiss SECO Consumer Climate and U.S.Prelim Nonfarm Productivity q/q, Prelim Unit Labor Costs q/q, Crude Oil Inventories, 10-y Bond Auction data that can change the rate of the pair.
Support and Resistance
(S3) 0.9634 (S2) 0.9653 (S1) 0.9665 (PP) 0.9683 (R1) 0.9702 (R2) 0.9714 (R3) 0.9732
Trading Forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the upward movement. That is why long positions at level 0.9720 with Stop Loss 0.9660 Take Profit 1 0.9777 and Take Profit 2 at 0.9805 are recommended.