USD/CHF dropped sharply to as low as 1.0575 last week and initial bias remains on the downside this week for rising trend line support (now at 1.0448). While the fall from 1.0897 is deeper than we originally thought, there is no change in the view that it's a correction in the larger rise. Hence, we'd expect downside to be contained by the mentioned trend line support to conclude the correction. On the upside, above 1.0647 minor resistance will turn intraday bias neutral and bring recovery. But break of 1.0809 resistance is needed to indicate that fall from 1.0897 has finished. Otherwise, another fall would remain in favor.
In the bigger picture, 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 1.0778) 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, sustained break of rising trend line support (now at 1.0448) is needed to invalidate this bullish view. Otherwise, outlook will remain bullish.
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.