USD/CHF's fall extended further to 1.0032 last week but lost momentum after touching 100% projection of 1.2296 to 1.0366 from 1.0883 at 1.0033. With 4 hours MACD staying above signal line, initial bias is neutral this week. Note that break of 1.0124 minor resistance will argue that a short term bottom is at least formed with bullish convergence condition in 4 hours MACD. Stronger rally should be seen to trend line resistance (now at 1.0299) first in this case. In case of another fall, we'd continue to expect strong support from parity to bring rebound.
In the bigger picture, whole set of price actions from 1.2296 are treated as correction to the medium term rally from 2008 low of 0.9634. Fall from 1.1963 is the third wave of such correction in form of five wave sequence (1.1158, 1.1740, 1.0590, 1.0883, ?). With 100% projection of 1.2296 to 1.0366 from 1.0883 at 1.0033 met, USD/CHF should be close to bottom. Break of 1.0452 resistance will be an important signal that fall whole fall from 1.1963 has completed and will turn focus back to 1.0883 resistance for confirmation. Also, this will argue that whole consolidation pattern from 1.2296 has finished too. We'll be looking at the prospect of much stronger medium term rally in such case. However, sustained trading below parity will pave the way to retest 2008 low of 0.9634.
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.