January 15th, 2015, is a date some FOREX traders will never forget, especially those with positions against the Swiss franc. “Business Insider” gives a pretty clear description: “In a shock move, the Swiss National Bank scrapped a three-year-effort to keep down the value of the franc, sending the Swiss currency soaring by as much as 30 percent. The soaring franc wreaked havoc on global markets and bankrupted several foreign exchange traders.” However, the natural market forces erased almost all of the franc’s gains in less than two months. For example, by March 12th, USDCHF climbed up to 1.0128, almost reaching the pre-shock top of 1.0240. Today, another two months later, the pair is trading close to 0.9280. But let’s take a look at a chart and see how the last four months look through the prism of the Elliott Wave Principle.
As visible, the post-panic recovery developed as a five-wave impulse with an extended fifth wave. And just as the Wave Principle postulates, the impulsive rally was followed by a three-wave correction. In addition, this W-X-Y double zig-zag retracement seems to have ended slightly above the 61.8% Fibonacci level. If this is the correct count, USDCHF should start rising again. The anticipated surge should surpass 1.0128, so the first long-term targets lie above this level.
