USD/CHF Weekly Outlook

USD/CHF's strong rebound last week indicates that correction from 1.2296 has completed at 1.1828 above mentioned 1.1802 support as expected. Further rise is expected this week, targeting 1.2296 high first. Sustained break will confirm medium term up trend has resumed and will encourage rally to next target of 161.8% projection of 1.0693 to 1.1746 from 1.1208 at 1.2912. On the downside, though, below 1.1960 minor support will indicate that another fall would be seen before completing the correction from 1.2296. Still, downside is expected to be contained by 1.1746 cluster support (50% retracement of 1.1208 to 1.2296 at 1.1752) and bring strong rebound.

In the bigger picture, medium term rise from 0.9634 is still in progress and should be targeting long term resistance zone of 38.2% retracement of 1.8305 to 0.9634 at 1.2946 and 1.3283 resistance (05 high). While some interim pull back might be seen, a break below 1.1208 is needed to indicate that a medium term top is formed. Otherwise, outlook will remain bullish.

In the longer term picture, multi-year down trend from 1.8305 (00 high) should have completed at 0.9634 with bullish convergence condition in monthly MACD and monthly RSI's breaking the down trend. Break of mentioned 1.1878 cluster resistance added more credence to this case. 1.3283 should be a minimum target in this case. On the downside, a break of 1.0693 low is needed to invalidate the long term bullish case.

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