EUR/CHF’s rebound from 1.0086 extended higher last week. The development suggests that pull back from 1.0400 has completed, and rise from 0.9970 is ready to resume. But as a temporary top was formed at 1.0369, initial bias is neutral this week first. On the upside, firm break of 1.0400 will target 100% projection of 0.9970 to 1.0400 from 1.0086 at 1.0516. On the downside, break of 1.0246 minor support will dampen this bullish view and turn bias back to the downside for 1.0086 support instead.
In the bigger picture, long term down trend from 1.2004 (2018 high) is still in progress. Next target is 100% projection of 1.2004 to 1.0505 to 1.1149 at 0.9650. In any case, sustained break of 1.0505 support turned resistance (2020 low) is needed to be the first sign of medium term bottoming. Otherwise, outlook will remain bearish.
In the long term picture, capped below 55 month EMA, EUR/CHF is seen as extending the multi-decade down trend. There is no prospect of a bullish reversal until some sustained trading above the 55 month EMA (now at 1.0891).
