USD/CHF dropped sharply after edging higher to 1.0337 last week. With 1.0224 minor resistance intact, initial bias remains mildly on the downside this week and deeper fall could still be seen. But still, downside is expected to be contained above 1.0032 low and bring rebound. Above 1.0224 will flip intraday bias back to the upside and further break of 1.0337 will bring rise resumption to 1.0452 resistance next.
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 and has possibly completed it's own five wave sequence already (1.1158, 1.1740, 1.0590, 1.0883, 1.0032). Break of 1.0452 resistance will affirm this case and turn focus to 1.0883 resistance for confirmation. Also, note that break of 1.0883 will be an important signal that whole consolidation from 1.2296 has completed too and stronger medium term rise should then be seen to retest 1.1963/2296 resistance zone next. On the downside, however, below 1.0032 low will indicate that the medium term down trend is still in progress and 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.