The USD/CHF pair experienced some sideways movement recently, reaching 0.8611 before leveling off. This week, the initial bias is expected to remain neutral, with a potential for further rally as long as the minor support at 0.8529 holds. If the pair surpasses 0.8611, it could continue its rebound from the short-term bottom of 0.8374 towards the 38.2% retracement level of 0.9223 to 0.8374 at 0.8698. On the contrary, a significant break below 0.8529 could shift the bias to the downside, leading to a retest of the 0.8374 low.
Looking at the bigger picture, the current price actions from the 0.8332 level (2023 low) are viewed as a medium-term corrective pattern, with the decline from 0.9223 representing the second leg. There is a possibility of strong support emerging from the 0.8332 level to trigger a rebound. Nevertheless, the overall outlook remains bearish as long as the resistance at 0.9243 holds. A decisive break below 0.8332 would signal a resumption of the larger downtrend from the 1.0146 level (2022 high).
In terms of the long-term perspective, the price action from the 0.7065 level (2011 low) is considered a corrective pattern within the multi-decade downtrend from the 1.8305 level (2000 high). The decline from 1.0342 (2016 high) is seen as the second leg of this corrective pattern. The rejection at the 55 M EMA indicates that this decline is ongoing. If the pair breaks below the 61.8% retracement level of 0.7065 to 1.0342 at 0.8317, it could open the path towards revisiting the 0.7065 level.
It is essential for traders and investors to closely monitor the key support and resistance levels mentioned above to make informed decisions regarding their USD/CHF positions. The market dynamics and economic indicators can play a significant role in shaping the future movements of this currency pair. By staying updated with the latest developments and conducting thorough analysis, traders can better navigate the fluctuations in the USD/CHF market and optimize their trading strategies for potential opportunities.
