The extended decline of USD/CHF last week indicates that the rebound from 0.7603 has been completed as a corrective move to 0.8041. The initial bias remains to the downside this week. A sustained break of the 61.8% retracement levels from 0.7603 to 0.8041 at 0.7770 will pave the way for a retest of the bottom at 0.7603. On the upside, minor resistance above 0.7844 will shift the intraday bias to neutral first.
In the bigger picture, a bounce from the medium term low of 0.7603 is only a correction of the drop from 0.9200. Rejection by 55 W EMA (now at 0.8068) will confirm this bearish condition, and set up resumption of downtrend to 100% forecast at 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382 at a later stage. Despite this, a sustained break of the 55 W EMA would indicate that a larger downtrend correction from 1.0146 (2022 high) is likely.
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.
