The current primary structure on USDCHF pair hints to a complex corrective pattern. With waves Ⓐ and Ⓑ having already completed we could now expect prices to unroll to the downside in an impulsive manner.
After the completion of intermediate wave (1), an intermediate correction (2) can be expected.
It is possible that this correction (2) takes the form of a minor zigzag А-В-С and completes its bullish course near 0.9895. That level is the 50% Fibonacci retracement of the intermediate wave (1).
Such a scenario would be followed by strong bearish momentum, breaking to fresh lows. The correction could, however, be weaker on the upside, reaching only the 38.2% Fibonacci, or even lower areas. That would make the bearish breakout move even stronger.
Looking at the charts a little closer provides an alternative scenario that can’t go missing. According to this formation, intermediate wave (1) has not yet been completed.
This impulse would consist of minor sub-waves 1-2-3-4-5 again. However, wave 5 is thought of as a wave 3 minor. Wave 4 on the other hand, would still be forming.
If this hypothesis is correct, we could expect the pair to rise near 0.983, where wave C will be equal to wave A, forming a flat correction. Then, a decline near 0.971 would be made possible.
At the level, wave 5 would be at the 78.6% Fibonacci retracement of impulse wave 3.