Just two days ago, on Monday, while USDCHF was trading around 0.9785, we published “USDCHF Is Not The Pair to Buy Right Now”, citing that it “could be expected to continue to the south from now on”. Today, because of Trump’s victory or not, the exchange rate plunged to 0.9549. So far, so good. The problem is that we were anticipating a larger selloff to take the pair below 0.9444. But instead of increasing the pressure, the bears allowed a recovery back up to the 0.9750s, which makes us think an update is needed. So here it is.
The situation simply inspires a better idea now. If we take a step back a see the big picture, it turns out today’s slump could be seen as wave (e) within a triangle correction wave B, following a five-wave advance from 0.8319 to 1.0128. The fact that each of the five sub-waves of the triangle could easily be seen as a three-wave sequence adds even more confidence to this count. According to it, USDCHF is likely to go higher in wave C up. In the long run the bulls should be able to take out the high at 1.0328. On Monday, it was not the time to buy the pair. Now, it does not seem to be the time to sell it.