The USD/CHF pair remains under some selling pressure for the second successive day on Wednesday and retreats further from its highest level since May 2019 touched last week. The downward trajectory drags spot prices to a three-week low, around the 0.9855 area during the first half of the European session and is sponsored by the heavily offered tone surrounding the US dollar.

Investors now expect that the US central bank will be forced to soften its hawkish stance amid signs of a slowdown in the world's largest economy. This is evident from a further decline in the US Treasury bond yields, which continues to weigh on the greenback and exert downward pressure on the USD/CHF pair.

On the 1H timeframe for the USDCHF pair, we see the final part of the proposed large double zigzag consisting of cycle sub-waves w-x-y. This pattern looks fully completed, that is, the price decline in the cycle wave y, which is the primary standard zigzag, has come to an end.

Currently, there is a development of the initial part of a new corrective trend.

It is assumed that a standard 3-wave zigzag of the primary degree Ⓐ-Ⓑ-Ⓒ is being constructed.

Perhaps the first two sub-waves Ⓐ-Ⓑ are fully completed, so growth is expected in the direction of the 1.0096 level, in the impulse Ⓒ, the last leg of which takes the form of an ending diagonal 1-2-3-4-5, as shown in the chart.

At that level, wave Ⓒ will be at 123.6% of first impulse Ⓐ.

Alternatively, the cycle pattern may take a more complex form, that is, a triple zigzag w-x-y-x-z.

Thus, if this option is confirmed, we will see a decrease in the price and the construction of the final sub-wave z.

It is possible that the wave z will be at 123.6% of wave y and will complete its pattern near 0.931. And its first part, the primary sub-wave Ⓐ, may end at a minimum of 0.947.

An approximate scheme of possible future movement is shown on the chart.

USDCHF Almost Completing The Ending Diagonal

Oct 26 2022