USD/CHF struggled to stay above medium term trend line again last week and continued to consolidate in range below 1.0897. More sideway trading might be seen initially this week and a deeper fall cannot be ruled out. Nevertheless, we'd expect downside to be contained by 1.0608 cluster support (38.2% retracement of 1.0131 to 1.0897 at 1.0604) and bring rally resumption. Above 1.0877 will flip intraday bias back to the upside. Sustained trading above medium term trend line resistance (now at 1.0832) will pave the way to 161.8% projection of 0.9916 to 1.0506 from 1.0131 at 1.1086 next.
In the bigger picture, there is no change in our view. Medium term correction from 1.2296 should have completed with three waves down to 0.9916 already. Current rise from 0.9916 is tentatively treated as resumption of the long term up trend from 2008 low of 0.9634. Sustained break of mentioned medium term trend line resistance (now at 1.0832) will further affirm this view. In such case, we'd be looking at stronger rise to 1.1963/2296 resistance zone in medium term. On the downside, break of 1.0131 support is needed to invalidate this bullish view. Otherwise, another rise is still expected even in case of deep pullback.
In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in daily MACD. USD/CHF failed to take out 55 months EMA and reversed again and thus gives no confirmation of long term reversal yet. We're neutral in the long term outlook for the moment and would wait for further evidence from the markets before making a stance.