USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.0849; (P) 1.0891; (R1) 1.0973; More

USD/CHF's recovery was limited at 1.0952 and weakens sharply. Break of 1.0809 low will confirm that recent decline has resumed for trend line support at 1.0753. Break there will target 1.0366 key medium term support next. But before that, some more consolidation might still be seen. Though, focus remains on 1.0976/1262 resistance zone and sustained break there is needed to indicate that fall from 1.1740 has completed. Otherwise, short term outlook remains bearish.

In the bigger picture, the successive break of 61.8% retracement of 1.0366 to 1.1963 at 1.0976 and 1.0864 support dampened the view that fall from 1.1963 is correcting rise from 1.0366. Instead, the development opens up the bearish case that fall from 1.1963 is part of the pattern that started at 1.2296. Focus will now turn to last line of defense for the bullish case in trend line support at 1.0753. Decisive break there will add much credence to the bearish case and should bring deeper decline to retest 1.0366 next. Nevertheless, strong rebound from there, followed by break of 1.2620 resistance will revive the bullish case and encourage a retest of 1.1963/2296 resistance zone.

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