USD/CHF turned into sideway trading last week and more consolidations would likely be seen above 1.0399 initially this week. Nevertheless, note that short term outlook remains bearish as long as 1.0674 resistance holds and recent fall from 1.1729 is still in favor to continue. Break of 1.0394 will target outer trend line support (0.9634, 0.9916, now at 1.0017). However, considering bullish convergence condition in 4 hours MACD, break of 1.0674 will suggest that 1.0399 is at least a short term bottom and should bring stronger rebound to 55 days EMA (now at 1.0853).

In the bigger picture, USD/CHF is possibly in the process of forming a medium term sideway pattern that started as the long term bottom of 0.9634 (2008 low). The pair will continue to stay in converging range of 0.9634/1.2296 for a while. A break of either 0.9916 support or 1.1729 resistance is needed to indicate that USD/CHF is back into a directional trend. Otherwise, medium term outlook will remain neutral.

In the longer term picture, a long term bottom is no doubt in place at 0.9634 with bullish convergence condition in monthly MACD. But the current outlook is rather unclear. Firstly, USD/CHF is staying in convergence range of 0.9634/1.2296. Secondly USD/CHF lacks sustained buying to send it through 55 months EMA (now at 1.1394) decisively yet. We'd stay neutral first until a break out from the current medium term range.

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