USD/CHF Weekly Outlook

USD/CHF rose further to as high as 1.0793 last week and met mentioned target of 100% projection of 0.9916 to 1.0506 from 1.0131 at 1.0721 as expected. Initial bias remains on the upside this week and further rise should be seen to medium term trend line resistance at 1.0921 next. On the downside, below 1.0694 minor support will turn intraday bias neutral and bring consolidation. But downside should be contained by 1.0497 support and bring rally resumption.

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 1.0921) will further affirm this case and should target 161.8% projection of 0.9916 to 1.0506 from 1.0131 at 1.1086 next. On the downside, break of 1.0131 support is needed to invalidate this view. Otherwise, another rise is still expected even in case of deep pullback.

In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in daily MACD. USD/CHF failed to take out 55 months EMA and reversed again and thus gives no confirmation of long term reversal yet. We're neutral in the long term outlook for the moment and would wait for further evidence from the markets before making a stance.

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