EUR/CHF’s rebound from 1.1366 last week was stronger than originally expected, indicating short term bottoming. Thus, while initial bias is neutral this week first, further rise is mildly in favor as long as 1.1505 minor support holds. Above 1.1639 will extend the rebound from 1.1366 to 61.8% retracement of 1.2004 to 1.1366 at 1.1760. But after all, the corrective pattern from 1.2004 is extend to extend with at least one more falling leg. Hence, we’ll look for reversal signal again above 1.1760. On the downside, break of 1.1505 will suggest that the rebound is completed. And intraday bias will be turned back to the downside for retesting 1.1366.
In the bigger picture, current development suggests solid rejection by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily and weekly MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Such correction is expected to extend for a while and therefore, we’re not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.
