Short Update on Swissie's Wolfe Wave: The Weekly

The following is an update on my previous blog article “ Long-Term USDCHF Wolfe Wave? ”.

After all the tweaking I had to do to end up with a not-much-satisfying monthly set of potential Wolfe Waves for the USDCHF, and especially because being mostly an intraday trader the perspective to have a potential profit target lying ahead 2 to 6 years from now was starting to feel quite unreal, I decided to check other lower time frames on this pair and finally found THIS (the devil is in the details, they say…):

An almost perfect, “by-the-book”, small but powerful Wolfe Wave on the weekly charts!

And this time, the long-term scope is more believable, only 7 months and a half from now, targeting early November 2011 with a quite moderate price level, closer to parity.

Now we’re talking.

Let’s get over that checklist again:

1. Waves 3-4 must stay within the channel created by 1-2 = PASSED
2. Wave 1-2 equals waves 3-4 (shows symmetry) = PASSED (a three-leg move in both cases, up-down-up)
3. Wave 4 is within the channel created by waves 1-2 = PASSED
4. There is regular time between all waves = PASSED
5. Wave 5 exceeds trendline created by waves 1 and 3 = PASSED

The second part of point 5, “and is the entry point”, will have to be determined through a careful examination of lower time-frames.

Daily Overview = still bearish

4-Hour Overview = MACD slightly bullish but overall still bearish

Hourly Overview = another Wolfe Wave, this time a bearish one

My views on the Swissie for next week (March 20-25) and beyond:

Price might do a quick retest of 0.9140/0.9200 and then resume the fall down to 0.8820*/0.8780 till next Friday, which will then be a good number 5 and entry point for this weekly Wolfe Wave to start building the ascension towards 1.0490/1.05 from late March/early April 2011 to ETA in early November. I guess at that point we might also be very near or at the weekly SMA200.  

Let’s see what goes on this week and we will be reassessing the validity or failure of the above pattern after next Friday close.

* Note: 0.8820 is the 161.8% extension of weekly wave 2-3