USD/CHF Daily Outlook

Daily Pivots: (S1) 1.0511; (P) 1.0552; (R1) 1.0592; More

USD/CHF's break of 1.0606 suggests that recent rebound from 0.9634 has resumed but upside momentum is not that convincing. Neverthless, further rally is still in favor as long as 1.0422 support holds, towards next upside target of 161.8% projection of 0.9634 to 1.0249 from 0.9887 at 1.0902. However, with bearish divergence condition in 4 hours MACD as background, break of 1.0422 will argue that the whole rise from 0.9634 may be over. Focus will then be shifted back to lower channel support (now at 1.0157) first.

In the bigger picture, firm break of 1.0352/83 resistance zone (50% retracement of 1.1105 to 0.9634 at 1.0370 and 38.2% retracement of 1.1596 to 0.9634 at 1.0383) indicates that decline from 1.1596 has completed and a medium term bottom is probably in place at 0.9634 . Sustained trading above 55 days EMA (now at 1.0341) supports this case too. Further rebound should then be seen to resistance zone of 1.0890 to 1.1596. With 38.2% retracement of 1.3283 to 0.9634 at 1.1028 inside the range, strong resistance should be seen there, at least initially. On the downside, break of 0.9995 support is needed to confirm rebound from 0.9634 has completed. Otherwise, another rise is still in favor even in case of deep pull back.

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