The USDCHF currency pair has been on a notable descent since reaching a peak on January 13, 2026. A significant indicator of this trend is the presence of a 5-wave impulse pattern, a fundamental principle in Elliott Wave analysis that traders lean on for forecasting price movements. This methodology breaks down price trends into specific waves, enabling a more strategic approach to trading.
Initially, after peaking, the first wave saw the USDCHF plunge to 0.8965. This drop illustrates the collective behavior of traders reacting to market sentiments and economic factors impacting the dollar and Swiss franc. Following this initial decline, the currency pair experienced a momentary rebound, or what is referred to as wave 2, which nudged the price back up to 0.9196. Such fluctuations are intriguing as they reveal the market’s volatility—highlighting how traders can capitalize on both upward and downward movements.
Unfolding of Wave 3: A Series of Declines
Wave 3 marked the most significant downturn, characterized by several sub-stages that reflect the intensity of the selling pressure. The pair initially plummeted to 0.8356, indicating a crucial juncture for traders analyzing potential price reversals. The completion of an internal sub-wave, marked as wave ((i)), was followed by a minor recovery to 0.8583 for wave ((ii)). This pattern signifies the uncertainty and the constant tug-of-war between bullish and bearish traders within the market.
The following stages of wave 3 saw further declines, with wave ((iii)) reaching a low of 0.8096. This stage was crucial as it reinforced the pattern that the market was strongly favoring the Swiss franc over the dollar. Subsequently, wave ((iv)) involved a slight upward correction to 0.8203, offering traders a brief respite before the final leg of the wave, wave ((v)), dropped down to 0.803. The completion of wave 3 indicated a heightened bearish sentiment and set the stage for the upcoming waves.
Wave 4: The Zigzag Correction
Currently, USDCHF is experiencing what is characterized as an upward correction in wave 4. This correction takes the form of a zigzag pattern. From the recent low of 0.803, the pair’s ascension to 0.8124 in wave (i) suggests some renewed buying interest. However, this was met with a pullback to 0.8066 in wave (ii), indicating that while the bulls are trying to regain control, the bears are still very much present in the market.
The climb continued with wave (iii) peaking at 0.8286, only to be followed by another minor retreat to 0.8194 during wave (iv). This sequence showcases the inherent volatility of currency trading, as traders navigate through rapid fluctuations in market sentiment. The push to 0.8311 completed wave ((a)), the first component of wave 4, but the current retracement, known as wave ((b)), has traders on alert.
The Outlook for USDCHF
As this currency pair continues to navigate the complexities of these waves, the key support level of 0.8036 will serve as a critical baseline. Should this level hold firm, there is a promising potential for the USDCHF to not only stabilize but also to ascend to even higher levels in the impending cycles. This volatility underscores the importance of closely monitoring market movements and signals, as traders position themselves for the next major trend is set to emerge. The dynamic nature of the USDCHF serves as an exemplar of the forex market’s indomitable spirit.