EUR/CHF’s choppy rebound from 1.1478 extended higher last week but stayed below 1.1656 resistance. Initial bias remains neutral this week first. On the upside, break of 1.1656 will resume the corrective rise from 1.1366 short term bottom. EUR/CHF should target 61.8% retracement of 1.2004 to 1.1366 at 1.1760. But we would expect strong resistance from there to limit upside. We’d still expect at least one more falling leg before the correction from 1.2004 completes. On the downside, break of 1.1478 will turn bias to the downside for 1.1366 first.
In the bigger picture, EUR/CHF was solidly rejected by prior SNB imposed floor at 1.2000. Considering bearish divergence condition in daily and weekly MACD, 1.2004 should be a medium term top. And price action from 1.2004 is correcting the up trend from 1.0629. Such correction is expected to extend for a while and therefore, we’re not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.