U.S. Dollar / Swiss Franc (USDCHF) — H4 Formation of Wave 3

U.S. Dollar / Swiss Franc (USDCHF) — H4 Formation of Wave 3 + Trendline Break (Bearish Continuation)

Market Structure (H4)

On the H4 timeframe, USDCHF has formed the technical conditions for the development of Wave 3 to the downside, confirmed by:

a breakout below the corrective trendline (structure shift)

completion of the pullback phase (Wave 2) near local resistance

rejection from the upper boundary of the corrective range

loss of short-term bullish momentum and renewed selling pressure

This setup fits a classic Elliott Wave continuation model, where Wave 3 begins after price exits a corrective structure and resumes the dominant bearish direction.

Elliott Wave Context

Wave 1: initial impulsive move down (trend initiation)

Wave 2: corrective retracement into resistance / structure top

Wave 3: expected impulsive expansion lower (current scenario)

Key principle:
The bearish scenario remains valid as long as price stays below the high of Wave 2.

Entry

Entry: 0.77089

The entry is positioned:

below the broken trendline (breakdown confirmation zone)

inside the impulse activation area after the corrective structure failed

aligned with continuation momentum rather than a reversal attempt

Target Levels (Wave 3 Projections)

Targets are derived from projected impulse expansion zones and key reaction levels:

TP1: 0.76594

TP2: 0.76014

TP3: 0.75406

TP4: 0.74849

Each target is a potential reaction zone and a logical level for partial profit-taking during Wave 3 development.

Invalidation / Stop Loss

Stop Loss: 0.77562

The stop is placed above the high of Wave 2, which:

invalidates the Wave 3 bearish scenario if breached

protects against a shift into an alternative bullish structure

follows Elliott Wave risk placement beyond the corrective extreme

Risk & Trade Management

Trend-following setup
Wave 3 can accelerate quickly, so risk control is key.

Recommended approach:

partial profits at TP1 / TP2

move stop to breakeven after a clean bearish continuation is confirmed

avoid adding early — scale only on intrawave pullbacks that respect resistance

confirmation improves if price holds below the broken trendline and continues with strong H4 bearish closes

Summary

USDCHF on H4 shows a corrective trendline breakdown and signs of Wave 2 completion, supporting the start of Wave 3 to the downside.
The bearish scenario remains valid below 0.77562, with downside targets at 0.76594 → 0.76014 → 0.75406 → 0.74849.