EUR/CHF’s fall from 1.1713 extended last week as expected. Downside acceleration affirm our bearish view that corrective rebound from 1.1366 has completed with three waves up to 1.1713 already. Initial bias stays on the downside this week. Break of 1.1478 support will further confirm our view and target 1.1366 low. On the upside, break of 1.1603 resistance is needed to indicate completion of the fall from 1.1713. Otherwise, near term outlook will stay bearish in case of recovery.
In the bigger picture, 1.2004 is seen as a medium term top with bearish divergence condition in daily and weekly MACD. 1.2000 is also an important resistance level. Hence, the corrective pattern from 1.2004 is expected to extend for a while before completion. We’re not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.
