EUR/CHF’s down trend resumed after brief recovery and hit as low as 1.0657. Initial bias stays on the downside this week. Firm break of 61.8% projection of 1.1149 to 1.0694 from 1.0936 at 1.0655 will target 100% projection at 1.0481, which is close to 1.0505 key long term support. On the upside, break of 1.0764 resistance is needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.
In the bigger picture, fall from 1.1149 (2021 high) is currently seen as the second leg of the patter from 1.0505 (2020 low) first. Hence, in case of deeper fall, we’d look for strong support from 1.0505 to bring rebound. However, sustained break of 1.0505 will resume the long term down trend from 1.2004 (2018 high). Also, medium term outlook will now be neutral at best as long as 1.0936 resistance holds.
In the long term picture, rejection by 55 month EMA (now at 1.1037) maintains long term bearishness. Break of 1.0505 low will resume the down trend from 1.2004 to 61.8% projection of 1.2004 to 1.0505 to 1.1149 at 1.0223.
