Guest Commentary: Hourly USDCHF - Reverse Engineering S/T Price Action
* The clear five wave downtrend sequence in USDCHF from the ideal 99.70 upside target, which itself was a clear 5 wave pattern confirms the downtrend reversal.
Thus we remain in short term upside correction to the recent decline that in a broad sense targets a pullback to the 50 to 61.8 percent target zone of 98.35 to 98.65.
Having said that, I will now attempt to use some reverse financial engineering to derive potential short term price action. First the downside target on the Daily is a 38.2 percent correction or 96.00. The first leg of the decline or A wave was from 99.70 to 96.95 or 275 points. Adding the 275 points from the ultimate C wave target of 96.00 suggests the current B wave upside correction will end at 98.75. The first leg of this upside correction is complete with the rally from 96.95 to 98.25 or 130 points.
Under the assumption that the interim b wave finds 61.8 percent support at 97.45, this projects a 130 points rally from 97.45 to the ideal 98.75 objective. Just bear in mind any deeper B wave decline than 97.45 would threaten the 96.95 base and a possible early start of the decline to 96.00.
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