The internal structure of the USDCNH pair hints at the primary zigzag pattern Ⓐ-Ⓑ-Ⓒ. This in the long term forms a cycle correction IV.
The final primary wave Ⓒ takes the form of an intermediate 5-wave impulse (1)-(2)-(3)-(4)-(5).
The current structure could indicate that bullish intermediate impulse (3) has ended. Currently, an intermediate correction wave (4) is forming. This takes the form of a minor double zigzag W-X-Y near 6.543. At that level, intermediate correction will be at 61.8% of impulse (3).
After the end of the correction (4), the final sub-wave (5) could move higher above the level of 6.839 marked by impulse (3).
An alternative scenario shows that the construction of the entire cycle correction IV could already be completed. It took the form not of a simple zigzag, but of a double zigzag consisting of primary sub-waves Ⓦ-Ⓧ-Ⓨ.
Thus, if this assumption is correct, prices could move lower forming the final cycle wave V.
Most likely, wave V will complete its development in the area of the previous minimum of 6.302, marked by impulse III. Moreover, at that level, wave V will be at 61.8% of impulse III. Therefore, the probability of achieving this coefficient is high.
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