The USDCHF daily Elliott Wave analysis highlights a strong bearish trend underway for this currency pair. The focus is on orange wave 3, which functions as a key segment within the broader structure of navy blue wave 3.

Technical indicators confirm the end of the orange wave 2 correction, with current price action advancing through the impulsive phase of orange wave 3. Historically, wave 3 segments tend to show the strongest and most extended moves, pointing toward further potential downside.

The invalidation level is set at 0.886. A move above this would question the current bearish forecast. This daily chart view offers traders a comprehensive understanding of the active impulsive phase, while also positioning it within the larger market framework.

Upon completing orange wave 3, the analysis expects a corrective pullback in orange wave 4 before a possible continuation to the downside via orange wave 5. The interpretation stresses the importance of recognizing wave degree alignment—orange wave 3 not only stands as the current focus but also plays into the deeper navy blue wave 3 structure.

Traders should watch for traits typical of a third wave, including strong momentum and prolonged bearish movement. This setup favors short positions in line with the dominant trend. However, risk management near the invalidation threshold remains critical.

This analysis delivers actionable insights for forex traders aiming to benefit from the pronounced bearish move in USDCHF, with the daily chart providing a clear outlook on both short-term trades and long-term positioning.

USD/CHF Elliott Wave technical analysis

Function: Bearish Trend.

Mode: Impulsive.

Structure: Gray wave 3.

Position: Orange wave 3.

Direction next higher degrees: Gray wave 4.

Details: Gray wave 2 appears completed; gray wave 3 is actively unfolding.

Wave cancel invalid level: 0.886.

The 4-hour Elliott Wave analysis of USDCHF reveals a strong bearish trend currently dominating this currency pair. The primary focus is on gray wave 3, a key segment within the broader orange wave 3 in the overall wave structure.

Market analysts indicate that gray wave 2 has likely concluded its corrective stage. Price action is now progressing through gray wave 3—an impulsive move that generally reflects increased volatility and directional strength. Historically, this wave tends to be the most forceful and extended, pointing to substantial downside potential.

The invalidation point remains set at 0.886. A move above this would counter the current bearish outlook. This 4-hour view provides short-term traders with a focused lens into the wave’s structure, while remaining aligned with the higher timeframe count.

Once gray wave 3 completes, a correction in gray wave 4 is anticipated, followed by further decline into gray wave 5. The analysis underscores the alignment of wave degrees—gray wave 3 serves both as an immediate opportunity and a part of orange wave 3’s broader trend.

Traders should expect typical third wave features, including high momentum and extended declines. This setup favors short positions while requiring disciplined risk management around the key invalidation level.

This technical breakdown delivers actionable insight for forex traders aiming to leverage the downward momentum in USDCHF, with the 4-hour chart offering strong visibility of the immediate and mid-term trend.

Technical Analyst: Malik Awais.

USD/CHF Elliott Wave technical analysis [Video]

Author

Peter Mathers

TradingLounge

Peter Mathers started actively trading in 1982. He began his career at Hoei and Shoin, a Japanese futures trading company.

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