The USD/CHF pair took a dive to 0.8825 last week before making a strong recovery. Currently, the initial bias is neutral for consolidations above 0.8825, with a bearish outlook in the near term as long as the resistance at 0.8992 holds. If the support at 0.8825 is broken, we can expect a continuation of the fall from 0.9223 towards the 61.8% retracement level at 0.8672.
Looking at the bigger picture, the price movements from the medium-term bottom at 0.8332 are forming a corrective pattern within the downtrend from the 2022 high of 1.0146. The rejection at the 0.9243 resistance confirms this scenario and maintains a bearish outlook for the medium term. While there may be more range trading between 0.8332 and 0.9243 initially, a downside breakout is likely at a later stage.
In the long-term perspective, the price action from the 2011 high of 0.7065 is viewed as a correction within the multi-decade downtrend from the 2000 high of 1.8305. A strong rebound from the 61.8% retracement level of 0.7065 to 1.0342 (2016 high) could initiate the third leg of a medium-term rally. However, a definitive long-term reversal will not be evident until there is a firm break of the 38.2% retracement level of 1.8305 to 0.7065 at 1.1359.
In conclusion, the USD/CHF pair is currently navigating through various levels of support and resistance, with a bearish bias in the near term and a corrective pattern unfolding in the medium and long term. Traders and investors should monitor key levels such as 0.8825, 0.8992, and 0.9243 for potential breakout or reversal opportunities in the coming weeks.
