The USD/CHF pair rebounded to the 0.7906 level last week but failed to break the 0.7923 resistance level and retreated. Initial bias remains neutral this week first. On the downside, a strong break of 0.7837 will indicate that the rebound is complete, and will lead to a deeper drop to 0.7760. However, a decisive break of 0.7923 would indicate that this correction from 0.8741 has been completed and bring back a stronger rise to this resistance.
In the bigger picture, as long as the 55 W EMA (now at 0.8035) holds, the decline from 0.9200 is expected to continue, as part of a larger downtrend. A strong break at 0.7603 would target a 100% forecast at 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382.
In the longer term picture, price action from 0.7065 (2011 low) is seen as a corrective pattern to the multi-decade downtrend from 1.8305 (2000 high). It is uncertain whether the drop from 1.0342 is the second stop of the pattern, or a resumption of the downtrend. But in both cases, the outlook will remain bearish as long as the 0.8756 support turns into resistance (2021 bottom). A retest of 0.7065 should be seen next.
