FX.co ★ USD/CHF analysis for January 16, 2013

USD/CHF Elliott Wave
Since our last analysis the USD/CHF par has traded upward like we expected, corrective (C) wave (coloured red) of the bigger A wave (coloured purple) has developed. Yesterday during the Asian and European sessions we could observe strong ascending movement from 0.9217 toward the 0.9308 level. Therefore, during the New York session this major pair continued trading in a bullish mood and the price reached a new high at 0.9331 level. We can consider this move as the end of the A wave. At the moment the USD/CHF pair is trading around 0.9296 level and we expect to see a retrace all the way to the start of the (A) wave (coloured red) of the bigger A wave (coloured purple). In accordance with our wave rules and taking into account that the wave B should retrace 100% of the wave A, we can define the potential targets with measuring wave A with take profit at 0.9077 (100% of wave A). To reduce the risk, we can use resistance at 0.9340 level as stop loss.

Support and resistance
(S3) 0.9165 (S2) 0.9212 (S1) 0.9240 (PP) 0.9287 (R1) 0.9334 (R2) 0.9362 (R3) 0.9409

Trading forecast
Proceeding from Elliott Wave rules today, the trend is expected to begin the downward movement. That is why short positions at level 0.9285 with stop loss 0.9340 and take profit at 0.9077 are recommended.