USD/CHF Weekly Analysis: Current Range and Outlook
Last week, the USD/CHF pair remained within the range of 0.8374 to 0.8548, with the overall outlook remaining unchanged. The initial bias for the upcoming week is expected to stay neutral. If the price breaks below 0.8374, it could potentially resume the downward trend from 0.9223 and retest the 0.8332 low. A decisive break below this level would indicate a larger downtrend resumption. However, there is a bullish convergence condition in the 4-hour MACD, suggesting that a break above the 0.8548 resistance could confirm a short-term bottoming and shift the bias back to the upside towards the 0.8747 resistance level.
Medium-Term Perspective: Potential Corrective Pattern
From a broader perspective, the recent price actions from the 0.8332 (2023 low) are viewed as a medium-term corrective pattern, with the decline from 0.9223 representing the second leg. Strong support is anticipated around the 0.8332 level, which could lead to a rebound. However, the overall outlook will remain bearish as long as the 0.9243 resistance level holds. A definitive break below 0.8332, on the other hand, would signal the continuation of the larger downtrend from the 1.0146 (2022 high).
Long-Term Outlook: Corrective Pattern and Downward Trend
In the long-term picture, the price action from the 0.7065 (2011 low) is interpreted as a corrective pattern within the multi-decade downtrend from the 1.8305 (2000 high). The decline from the 1.0342 (2016 high) is considered the second leg of this corrective phase. The rejection by the 55-period exponential moving average (EMA) indicates that this downward movement is currently in progress. A break below the 61.8% retracement level of 0.7065 to 1.0342 at 0.8317 would potentially pave the way for a return to the 0.7065 level.
Overall, the USD/CHF pair’s price action is poised at critical levels, with potential shifts in the trend depending on the key support and resistance levels. Traders should closely monitor the price movements and technical indicators to make informed trading decisions.
