USD/CHF saw a continuation of its rebound last week, with no clear signs of completion yet. The initial bias remains on the upside this week, targeting the 38.2% retracement level of 0.9223 to 0.8374 at 0.8698. A sustained break above this level could indicate that the fall from 0.9223 has ended after defending the 0.8332 low. This could lead to a further rally towards the 61.8% retracement level at 0.8899. On the downside, breaking below the minor support at 0.8605 may shift the intraday bias to neutral.
Looking at the bigger picture, the price actions from the 0.8332 low are currently viewed as a medium-term corrective pattern, with the fall from 0.9223 considered as the second leg. There could be strong support around the 0.8332 level to bring about a rebound. However, the overall outlook will remain bearish as long as the resistance at 0.9243 holds. A decisive break of the 0.8332 level could signal a resumption of the larger downtrend from the 1.0146 high in 2022.
From a long-term perspective, the price action from the 0.7065 low in 2011 is seen as a corrective pattern within the multi-decade downtrend from the 1.8305 high in 2000. The fall from the 1.0342 high in 2016 is considered the second leg of this corrective pattern. The rejection by the 55-day Exponential Moving Average (EMA) suggests that this downward movement is still ongoing. If the 61.8% retracement level of 0.7065 to 1.0342 at 0.8317 is breached, it could open the path for a return to the 0.7065 level.
In summary, USD/CHF is currently in a rebound phase, with the potential for further upside if key resistance levels are breached. However, the overall trend remains bearish, and a break below certain support levels could signal a continuation of the downtrend in the long run. Traders and investors should closely monitor these levels to gauge the future direction of USD/CHF.
