USDCHF The bigger picture: The long and winding road to nowhere
Updated
Between July 2001 and Aug 2011, USDCHF saw a constant depreciation (CHF strength) with just a few significant corrective rallies. At the end. it had dropped with 11k+ pips as it bottomed at 0.70668 (may vary from feed to feed). That was an insane 10 years of bear droppings. Since then, it has as most recovered a bit more than 3000 pips, which isn't even 38.2%, and all in all moved in a sideways, apparently endless correction to nowhere, mostly within a 1600 pips range. This has now gone on for more than 10 years and is probably one of the longest corrections in market history (although I haven't checked that).
In this idea I have marked up this correction as a so called "Complex" labeled with WXY, and as you can see there are complexes within complexes as this is 10 years of chop chop overlapping price action, mostly in 3 waves type of structures. Right now price is moving in an interesting, and many times contested, price zone and it feels that it's high time to make this in to a correction worth the name by at least reaching the 38.2% fib level. That would also mean that (y), the last major wave in this mastodon correction started to come in to shape. The first step in that process, or maybe it could be called "project", would be to break the trendline coming down from the Apr/May-19 high, which could happen somewhere between 0.9250-0.93.
Of course, to start with bulls need to take a stand and maybe can be helped by the fact that the winter is coming motivating bears into hibernation.
In this idea I have marked up this correction as a so called "Complex" labeled with WXY, and as you can see there are complexes within complexes as this is 10 years of chop chop overlapping price action, mostly in 3 waves type of structures. Right now price is moving in an interesting, and many times contested, price zone and it feels that it's high time to make this in to a correction worth the name by at least reaching the 38.2% fib level. That would also mean that (y), the last major wave in this mastodon correction started to come in to shape. The first step in that process, or maybe it could be called "project", would be to break the trendline coming down from the Apr/May-19 high, which could happen somewhere between 0.9250-0.93.
Of course, to start with bulls need to take a stand and maybe can be helped by the fact that the winter is coming motivating bears into hibernation.
Note
USDCHF Daily structure from the low points towards setting up yet another complex, with a likely target between 0.9640 to 0.9835 but with potential for as high as 1.08. Early days yet though as first that trendline needs to get broken and another drop lower cannot be excluded until then. The daily AO also continues to point lower, which means bearish pressure is still on. I'd like to see that starting to round of instead of being pointy. Another thing I would look for here is current AO block drops below the one of the previous low, without taking out the low price itself. That would be my first serious sign of a turnaround in motion.Note
Update of my weekly chart: With the strong NFP, the realization of Fed taper and that they probably are behind the curve and will have pace it up, I now see it very unlikely that we will come down to test lows (possibly 0.9019) and instead will start to move higher from around here. My take is that the negative moves we saw in USD at the end of last week was more about repositioning, shaking out week hands and a preparation for a considerable move higher. I don't expect that to happen on Monday already though.Note
The Covid-19 Omicron (B.1.1.529) variant threw a wrench in to the works of market at the end of last week and it's still too early to say what kind of damage it has caused to the longer term picture. From the information that has come through over the weekend it appears as if we have had a risk-off overreaction, once again. The move in the Euro across the markets was very suspicious in my view and I expect much of it, if not all and potentially more, will be retracted. Maybe the coming week already. In any way, I like to see more data as the week takes off before I make updates to my charts, but cautiously I think this can be a buying opportunity. In fact, if Omicron competes out Delta and proves to present much milder symptoms, resulting in less hospitalizations and decreasing death figures then we may be in for an even stronger risk-on move going forward. However, it's early days yet so let's wait for the data.
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