The USD/CHF pair saw a rise from 0.8374 last week, reaching a temporary peak at 0.8685. The initial bias for this week remains neutral. There is an expectation for further increase as long as the minor support level of 0.8629 is maintained. A significant breakthrough of the 38.2% retracement level from 0.9223 to 0.8374 at 0.8698 will suggest that the drop from 0.9223 has concluded after defending the low of 0.8332. This could lead to a further surge towards the 61.8% retracement level at 0.8899. However, there is a bearish divergence condition in the 4-hour MACD, so a solid breach of the 0.8629 support level will indicate a potential short-term peak and shift the bias towards a downward trend targeting the 55-day EMA at 0.8601.
When looking at the bigger picture, the price movements from the 2023 low of 0.8332 are currently viewed as a medium-term corrective pattern, with the decline from 0.9223 being the second wave. There is strong support expected from the range of 0.8332 to trigger a rebound. Nonetheless, the overall outlook will remain bearish as long as the resistance at 0.9243 remains intact. A clear breakthrough of 0.8332, however, will restart the larger downtrend from the 2022 high of 1.0146.
In the long-term perspective, the price action from the 2011 low of 0.7065 is considered a correction to the multi-decade downtrend from the 2000 high of 1.8305. The decline from the 2016 high of 1.0342 is seen as the second phase of this correction. The rejection by the 55-month EMA implies that this descent is still ongoing. A breach of the 61.8% retracement level of 0.7065 to 1.0342 at 0.8317 will likely pave the way for a return to 0.7065. This indicates a long-term bearish outlook for the USD/CHF pair.
