CHFJPY Elliott Wave Analysis - Favors Upside Amid Choppy Actions

CHFJPY currency pair is poised for more upside despite recent decline and choppy price action. How further can the long term bullish cycle continue before the next big pullback? 

Yen pairs have demonstrated significant bullish trends since the COVID-19 pandemic emerged. Following a bearish cycle in 2016, these pairs experienced a surge throughout 2017 and into 2018, although they subsequently retraced until January 2019. This robust bullish trend, which emerged after a sell-off between January 2015 and June 2016, is largely attributed to the Bank of Japan's persistent implementation of ultra-loose monetary policies, in contrast to the monetary policy tightening observed in other major banks in the post-COVID-19 era. As a result of the weakened JPY, the CHFJPY has reached record highs.

CHFJPY Long term View

From our Elliott wave perspective, we shared the long term view on the weekly charts. There, we reckoned the low of January 2019 to depict the end of the grand supercycle degree ((II)). From that low, price completed sub-waves (I), (II), (III) and (IV) of ((III)) and now in (V). From the low of September 2024 where wave (IV) ended, we reckoned price had completed waves ((1)), ((2)), ((3)) and ((4)) of I of (IV) of ((III)). Thus, price is in the wave ((5)) which started from the low of February 2026.

Therefore, the most recent significant bullish cycle on this pair started in February and its end will most likely mark the end of the broader bullish cycle from September 2024. Thus, a big corrective pullback of the September 2024 cycle may not be that far away. However, Elliott wave theory shows wave ((5)) is not yet over and short-term traders can still buy the dips. Let's now check the smaller cycles.

CHFJPY Elliott Wave Analysis - 1st Scenario

As the H4 chart shows, wave ((5)) appears to be in its early stages. Following the completion of waves (1) and (2) of ((5)), wave (3) began on March 3rd and could extend to the 208.33-210.79 region. The current pullback is anticipated as wave 2 of (3), correcting the previous 5-wave advance that surpassed the prior peak. Wave 2 is expected to end above the March 3rd low, likely between 201.76 and 201.15. From this zone, a new short-term bullish cycle should emerge for wave 3 of (3). As it establishes a new high, traders can look to buy the dips, as wave (3) is still a distance away. However, if this zone is breached and the price reaches the low of (2), the second scenario below should unfold.

CHFJPY Elliott Wave Analysis - 2nd Scenario

If the pullback extends below the low of wave (2) in the first scenario, a deeper wave (2) with an irregular flat structure could form. The flat could be contained between 200.42 and [#######], where new support might emerge. From this support level, or slightly below, we could see a new wave (3) emerge. Traders should wait for a break of the previous high to confirm the count, then look to buy the dips. Overall, the bullish run should continue as long as the pair trades above the 197.60 pivot.

Source: https://elliottwave-forecast.c...