The USD/CHF pair saw a rebound from 0.8374 last week, breaking through the 0.8548 resistance level. This upward momentum is expected to continue this week, with the initial bias favoring the upside towards the 38.2% retracement level at 0.8698. A sustained break above this level could indicate that the decline from 0.9223 has come to an end after finding support at 0.8332. The next target would then be the 61.8% retracement at 0.8899. However, if the price falls below the 0.8499 support level, the intraday bias could turn neutral once again.
Looking at the bigger picture, the recent price movements from the 0.8332 low are viewed as a medium-term corrective pattern, with the decline from 0.9223 considered as the second leg of this pattern. There is a strong support zone around 0.8332, which could lead to a rebound. Nonetheless, the overall outlook remains bearish as long as the 0.9243 resistance level is intact. A decisive break below 0.8332 would signal a resumption of the larger downtrend from the 1.0146 high in 2022.
In the long term, the price action from the 0.7065 low in 2011 is interpreted as a corrective pattern within the multi-decade downtrend from the 1.8305 high in 2000. The decline from the 1.0342 high in 2016 is seen as the second leg of this corrective pattern. The rejection at the 55 EMA suggests that this downtrend is still unfolding. A break below the 61.8% retracement level at 0.8317 would open the door for a return to the 0.7065 level.
Overall, the USD/CHF pair is showing signs of a potential rebound in the short term, but the long-term outlook remains bearish. Traders should closely monitor the key support and resistance levels mentioned to gauge the direction of the pair in the coming weeks.
