The USD/CHF pair experienced a decline from 0.9049 last week, despite a temporary recovery. It was anticipated that the bounce back from 8825 would end after being rejected by channel resistance. A further drop is expected as long as the resistance at 0.9000 remains intact, potentially reaching the low of 0.8825. If 0.8825 is broken, the next target would be the 50% retracement level of 0.8332 to 0.9223 at 0.8778. However, a break above 0.9000 could shift the bias towards the upside, targeting the resistance at 0.9049.
Looking at the bigger picture, as long as the resistance at 0.9243 is not breached, the medium-term outlook for USD/CHF remains neutral. It is likely that the pair will continue to trade sideways between the levels of 0.8332 and 0.9243. A decisive break above 0.9243 would indicate a significant bullish trend reversal.
In the long term, the price action from the 2011 high of 0.7065 is viewed as a corrective pattern 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 (the 2016 high) could initiate the third leg of a medium-term rally. However, a definitive long-term reversal would not be confirmed until there is a firm break above the 38.2% retracement level of 1.8305 to 0.7065 at 1.1359. This suggests that there is potential for further upside in the long run.