USD/CHF dived sharply to as low as 0.9535 last week but recovered. Initial bias is neutral this week first. Near term outlook will stay bearish as long as 0.9698 resistance holds. Below 0.9535 will extend the fall from 1.0037 and target a test on 0.9420 low. Nonetheless, firm break of 0.9698 will be the first sign of near term reversal. And, intraday bias will be turned back to the upside for 0.9844 resistance for confirmation.
In the bigger picture, range trading continues between 0.9420/1.0342. At this point, 0.9420 appears to be a strong support level. Therefore, in case of decline attempt, we don’t expect a firm break of this level. Nonetheless, strong break of 1.0342 is also needed to confirm upside momentum. Otherwise, medium term outlook will stay neutral.
In the long term picture, while upside momentum is unconvincing, with 0.9443 key support intact, rise from 0.7065 (2011 low) is still expected to continue. Break of 1.0342 will target 38.2% retracement of 1.8305 (2000 high) to 0.7065 at 1.1359.
