Daily Pivots: (S1) 1.0230; (P) 1.0285; (R1) 1.0328;
USD/CHF’s recovery from 1.0185 extended further today but is still limtied below 1.0388 resistance. Intraday outlook remains neutral for the moment. Break of 1.0388 will indicate that a short term bottom is at least formed and stronger rise should be seen to 1.0530 support turned resistance next. On the downside, however, break of 61.8% projection of 1.1740 to 1.0590 from 1.0883 at 1.0172 will indicate that recent decline is still in progress and might extend further towards 100% projection of 1.2296 to 1.0366 from 1.0883 at 1.0033, which is close to parity
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 should be in the last stage of the five wave sequence (1.1158, 1.1740, 1.0590, 1.0883, ?). We’d continue to look for loss of momentum and reversal signal as USD/CHF approaches next key cluster support level of 1.001, 100% projection of 1.2296 to 1.0366 from 1.0883 at 1.0033, which is close to parity. On the upside, break of 1.0530 resistance will be the an important signal that USD/CHF has finally reversed and further break of 1.1021 resistance will confirm.