USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.0664; (P) 1.0698; (R1) 1.0715; More.

USD/CHF drops to as low as 1.0576 today so far and the break of 1.0608 cluster support (38.2% retracement of 1.0131 to 1.0897 at 1.0604) argue that correction from 1.0897 is deeper than we expected. Intraday bias remains on the downside and further fall could now be seen towards near term rising trend line support (now at 1.0446) before completing the correction. On the upside, above 1.0647 will turn intraday bias neutral first. But break of 1.0809 resistance is needed to indicate that choppy fall from 1.0897 is completed. Otherwise, risk will remain on the downside.

In the bigger picture, medium term correction from 1.2296 should have completed with three waves down to 0.9916 already. Current rise from 0.9916 is tentatively treated as resumption of the long term up trend from 2008 low of 0.9634. Sustained break of mentioned medium term trend line resistance (now at 1.0778) will further affirm this view. In such case, we'd be looking at stronger rise to 1.1963/2296 resistance zone in medium term. On the downside, sustained break of rising trend line support (now at 1.0446) is needed to invalidate this bullish view. Otherwise, outlook will remain bullish.

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