"Gold, currencies like the Swiss franc...are some Treasury alternatives investors are looking to while they ride out uncertainty over the debt-ceiling negotiations in Washington." -- The New York Times, July 27.
Now that the U.S. dollar is trading at an all-time low against the Swiss franc, discussions of the Swiss franc's "safe haven" appeal are commonplace. But could you have seen the USD/CHF trading as low as it is today before the news?
If you know Elliott wave analysis -- yes. Here's how.
You see those two sets of converging trendlines? Those are Elliott wave patterns called "contracting triangles." Here's their idealized form:
You ask, how would this pattern help you to anticipate lower lows in the USD/CHF? Here's how: After a triangle ends, prices resume moving in the direction of the previous trend -- down, in this case.
No news, no drama, just pure Elliott.
Knowing the future implications of every Elliott wave move in USD/CHF can help you with your trading decisions.
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