USDCHF: Although USDCHF has backed off its Wednesday low(1.0647) and is now seen strengthening, as long as that is limited to its Mar 03'10 high at 1.0762 we envisage a recapture of the 1.0645 level, its Feb 17'10. On a trade below there, downside risk will build towards the 1.0607 level, its Feb 09'10 low. We expect a halt in price here to turn the pair back up again in line with its broader medium term uptrend triggered off the 0.9910 level in Nov'09 but if that level snaps, further downside pressure should target its.50 Fib Ret(1.0129-1.0896 rally) at 1.0512. Its daily RSI is bearish and pointing lower supporting this view. Alternatively, the pair must break and hold above the 1.0896 level to reverse the above view and then increase risk of further upside gains towards its July 26'09 high at 1.0933 and next its July 21'09 high at 1.1021. On the while, though biased to the upside in the medium term, corrective downside risk has been triggered suggesting lower level prices could targeted in the days ahead.

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