EUR/CHF dropped sharply to as low as 1.1366 last week but recovered since then. Some consolidations would be seen in near term and another rise cannot be ruled out. But upside should be limited by 38.2% retracement of 1.2004 to 1.1366 at 1.1610 to bring another decline. On the downside, break of 1.1366 will resume the fall from 1.2004 and target next key support zone between 1.1154 and 1.1198.
In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily and weekly MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Deeper fall would be seen to key cluster level at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154. We’d expect strong support around there to contain downside and bring rebound.
