USD/CHF Weekly Outlook

USD/CHF fell sharply last week after completing a double top and hit as low as 0.9363. The strong down trend momentum suggests that larger trend has reversed. Initial bias stays on the downside this week for 0.9369 support, and then 0.9287 fibonacci level. On the upside, break of 0.9544 minor resistance will turn intraday bias neutral first and bring consolidation, before staging another decline.

In the bigger picture, rise from 0.8756 (2021 low) has completed at 1.0146, well ahead of 1.0342 long term resistance (2016 high). Based on current downside momentum, fall form 1.0146 might be a medium term down trend itself. Break of 61.8% retracement of 0.8756 to 1.0146 at 0.9287 will pave the way to 0.8756. In any case, risk will stay on the downside as long as 55 day EMA (now at 0.9834) holds.

In the long term picture, long term sideway pattern from 1.0342 (2016 high) is extending and it’s probably in another medium term down leg. Downside will likely be contained by 0.8756 support in case of deeper fall. Overall, range trading should continue until further development.

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