The Franc had a free run at a corrective rally against the Dollar into the new week. With the US holiday today, for Martin Luther King Day, weighing on the US unit the CHF initially looked to rebound but bids in USD/CHF into 1.2445/50 propped. Add to equation the EUR/USD stalling into 1.2955 and the pair looks set to bounce with the sellers into 1.2480 offering the pair a decent topside target in the short-term.
However, we at IFR still favour the downside and a return and re-test of the 1.2400/10 area looks viable. The real volume needed to push such a move would not be that impressive amid the current conditions. Yet in real terms any such drop will be seen in the medium-term as a lightened corrective dip with only a break below 1.24 said to negate the renewed bullish bias on the charts.
In the longer-term the focus should remain on the 1.2490/2500 area with a break back into the 1.25's needed to return the attention to the Friday failure level at 1.2527.
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