USD/CHF Weekly Outlook

Despite edging lower to 1.0111, USD/CHF failed to sustain below 1.0147 support and rebounded strongly. With an intraday low in place, further rebound could be seen initially this week. Nevertheless, upside should be limited below 61.8% of 1.0539 to 1.0111 at 1.0376 and bring another fall. As discussed before, break of short term rising trend line support with daily MACD dipped into negative region argues that medium term rebound from 0.9634 is already completed at 1.0623. Sustained break of 1.0147 support will add more credence to this case and bring deeper fall to 0.9995 support. Also, note that short term risk remains on the downside as long as 1.0539 resistance holds even in case of a stronger than expected rebound.

In the bigger picture, a medium term bottom is in place at 0.9634. Subsequent rally from there is still treated as correction to whole medium term down trend only. Break of 1.0147 support will be another signal that such correction has completed. Further break of 0.9995 support will confirm this case and turn short term outlook bearish for 0.9634 low. However, strong rebound from 0.9995/1.0147 support zone will argue that rebound from 0.9634 is not completed yet and will put focus back to 1.0623 resistance.

In the longer term picture, a pattern of lower highs is clearly seen in USD/CHF since the medium term down trend begins at 1.3283. While 0.9634 could be a medium term bottom, there is no clear indication of long term trend reversal yet. 1.1596 resistance will be a key factor that's required to confirm long term down trend reversal, at least before any clear reversal pattern forms. Also, the fall from 1.3283 is still being treated as part of the whole down trend from 1.8305 (00 high) and should extend to 0.9 psychological support (61.8% projection of 1.8305 to 1.1288 from 1.3283 at 0.8964)

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