USDCHF Short Setup — Elliott Wave 5-3 Impulse: Riding Dollar Weakness
- John Nwatu MSTA CFTe
- May 7
- 1 min read
Pair: USDCHF | Bias: Short | Setup: Elliott Wave 5-3 Impulse | Date: 7th May 2026
The Setup
Dollar weakness is the dominant theme across the currency markets right now, and USDCHF is offering one of the cleaner technical expressions of that move. The wave structure, trend, and momentum are all pointing in the same direction which is to the downside.
The Elliott Wave count suggests the pair is progressing through a five-wave impulse to the downside, with the current move consistent with entry into the third wave. This is historically the most powerful and extended phase of any impulse sequence. For traders unfamiliar with Elliott Wave, the principle is straightforward: markets move in structured, repeating patterns of five waves with the trend and three waves against it. Identifying where you are in that sequence gives you a meaningful edge in anticipating the next move.
Trade Parameters
Entry: Confirmed breakout to the downside
Stop loss: 0.7850 — invalidates the wave count if reclaimed on a daily close
Confirmation: Daily close below 0.7775 builds a strong case for continuation lower
Bias: Short — riding broad USD weakness with clean wave structure support
Key Levels
0.7850 — Stop loss / structural invalidation
0.7775 — Confirmation of bearish continuation
0.7771–0.7782 — Primary swing support — break opens next leg lower
Nothing written here constitutes financial advice. Always conduct your own research and manage risk appropriately.
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