USDCHF ramble

I've been banging on about this pair almost exclusively on twitter for the last week or so, so figured I should put everything down in a single post here to consolidate my guff...

This pair has conformed well to my "stuff" on the hourly and indeed 'twas the Hourly which had me getting all long oriented at the start of May.

here is the marked up chart (click it to get a bigger view)

'Kay.. first up, note the green line on the MACD highlighting divergence on this indicator since mid-late may, where lows weree rising on the indicator whilst lows were falling on Price.

While this was unfolding, and I confess I got bitten quite a few times trying to get long a week earlier than I should have, price was forming a quite discernible wedge.
Check the start of the wedge and its "height" as marked by the purple segment and highlighted by a purple arrow... Theories state with a pattern like this a first target on a break is the height of the wedge at the start of the pattern, and this length also can be darned useful for checking out repeating ranges as price action unfolds...

anyways, we finally got a break UPWARDS on 5th of may.. and began a plottable up trend... to get more into that uptrend and how I view wm i'll zoom in a bit, and concentrate on what I do with price and the macd

orright... so, after the divergence mentioned, price breaks up... and in doing so the MACD makes it above the zero line and holds.

This gives me a wave 1 to mark on the MACD... and from that point on I ASSUME there will be 5 waves up on the timespan.

If that is to be the case, wave 2 (on the MACD moving averages (MAVs)) must form a low that is higher than the start of wave 1, and a good TRADE entry for wave 2 to wave 3 is on the price high of wave 1 (complex I know but it makes sense after about 100 iterations :P).
A wave 3 on price will form a higher MACD MAV high than wave 1 (as occurred) and a good CLOSE of the wave 2 to wave 3 trade on price is a MACD MAV signal versus slow crossover on the macd, particularly (as in this case but not marked on this chart) if it occurs around the 1.618 extension of wave 1.

Once a countertrend wave 4 appears to occur, the next trade I want to catch is wave 4 to wave 5.
Wave 4 on the MACD Mavs willl form a low lower than theat of wave 2, and often (again as occurred here) will actually dip below the zero line.

Some elliot wave based clues as to where wave 4 on price might bottom include...

Expectation of  small countertrend in the form of 3 waves
Expectation said countertrend will be simple or "clean" (wave 4 differs in structure to wave 2... in this case wave 2 was complex n messy so looking for a clean wave 4 (which we got))

Trade entry for wave 5 gave two opportunities, a great bounce from the 38 percent retrace of waves 1 to 3, and the macd signal MAV moving back up over the zero line, getting us in to wave 5.

Wave 4 bottom also gave a nice low to draw a trendline from start of trend to, which helped to give further entries along the way.

Right now the MACD MAVs are signalling that this total hrly uptrend MAY be nearing completion... I still expect a bit of a final surge up in the next day or two, but am mindful of the Divergence showing on the MACD moving averages now.. (lower highs while price makes higher highs) and the marked dottted black trendline should give clues as to where the final surge might occur or if we are done here.

In terms of targets though, looking at the daily...

A very neat down channel has occurred over the last 4 months, and the top of this channel may well be a place for price to stall... A break above it and perhaps we are going to get a greater or stronger trend, but when/if price hits the top of that channel, I will certainly be open to reorienting my head into downside and shorting mode








Tis interesting to overlay the daily channel on the hourly chart...

the top section of downsloping blue line on this chart shows a section of the daily channel... time n level wise this coincides VERY nicely with a 1.618 extension of waves 1 to 3 on price, and is my ultimate target for this hourly uptrend...

Good trading to all

;)