USD/CHF’s rebound from 0.7760 resumed last week and accelerated through the 0.7906 resistance. The development indicates that the decline from 0.8041 has completed as a correction to 0.7760. Initial bias remains on the upside this week to retest 0.8041 first. For now, the risk will remain on the upside as long as the minor support at 0.7867 remains in the event of a pullback.
In the bigger picture, while a medium-term bottom has been formed at 0.7603, it is still too early to call a reversal to the upside. As long as the 38.2% retracement from 0.9200 (2025 high) to 0.7603 at 0.8213 holds, the larger downtrend could continue through 0.7603 at a later stage. However, a strong break of the 0.7603 level would indicate that the trend has reversed and shift focus to the support at 0.8332 turned into resistance (2023 low) for confirmation.
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.
