USD/CHF Weekly Forecast: An In-Depth Analysis of Market Trends and Predictions
The USD/CHF currency pair experienced a recovery to 0.8548 last week, only to face a subsequent retreat. As we enter a new week of trading, the initial bias remains neutral. It is likely that we will witness more sideways movement in the market. However, the possibility of further decline remains high as long as the 0.8548 resistance level holds. A break below 0.8374 could signal a continuation of the downward trend from the recent peak of 0.9223, potentially leading to a retest of the 0.8332 low. If this support level is decisively breached, it could indicate a resumption of the larger downtrend.
On the other hand, there are indications of a potential reversal in the short term. The bullish convergence condition in the 4-hour MACD suggests that a break above the 0.8548 resistance level could confirm a short-term bottom and shift the bias back to the upside. In such a scenario, the next target would be the 0.8747 resistance level.
Medium-Term Outlook and Potential Reversal Patterns
Looking at the bigger picture, the recent price actions from the 0.8332 low are currently interpreted as a medium-term corrective pattern, with the decline from 0.9223 representing the second leg of this corrective move. While there is a possibility of a rebound from the strong support zone around 0.8332, the overall outlook remains bearish as long as the 0.9243 resistance level remains intact. A decisive break below 0.8332 could signal a resumption of the larger downtrend that originated from the 2022 high of 1.0146.
Long-Term Perspective and Potential Downward Trajectory
Taking a long-term view, the price action from the 2011 low of 0.7065 is viewed as a corrective pattern within the multi-decade downtrend that started from the 2000 high of 1.8305. The fall from the 2016 high of 1.0342 is considered as the second leg of this corrective move. The recent rejection by the 55-day exponential moving average (EMA) suggests that this downward trajectory is still in progress. A break below the 61.8% retracement level at 0.8317 could pave the way for a return to the 2011 low of 0.7065.
In conclusion, the USD/CHF currency pair is currently at a critical juncture, with conflicting signals in the short, medium, and long-term perspectives. Traders and investors should closely monitor key support and resistance levels to gauge the direction of the market in the coming weeks. The potential for a short-term reversal should not be discounted, but the overall bearish bias remains strong unless there is a decisive break above key resistance levels.
