We have provided multiple CHF ideas, where each and everyone one of them suggests weak Swiss Franc. It is very probable that CAD/CHF will follow the path of the CHF weakness and pair will continue to produce higher highs and higher lows at least in the short term.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
CAD/CHF symbol on the MT4 platform
Type: Bullish
Key support levels: 0.6855, 0.6845
Key resistance levels: 0.6905, 0.6985
Price Action:
On the Daily chart price has just broken above the downtrend trendline, which might be the confirmation of a strong bullish trend in the coming days and weeks. Although the nearest supply/demand zone is located just 100 pips away from the current price and is confirmed by the 38.2% Fibonacci retracement level applied to the corrective wave up after breaking below the uptrend trendline.
Besides, the breakout point area of the downtrend trendline also corresponds to the Fibonacci level at 0.6985 and should be an area of interest for the sellers.
On the hourly chart, price broke above the triangle pattern as well as 200 Simple and Exponential Moving Averages. We have applied Fibs to the corrective wave down after this breakout and 727.2% retracement level corresponds exactly to the 0.6985 resistance as per the Daily chart.
After the uptrend trendline break price corrected down and rejected 200 SMA and EMA, while at the same time bouncing off the trendline itself which has acted as the support. This shows that the 0.6865 price area remains strong support and while being rejected, can result in the continuation of the uptrend.
Potential Trade Idea:
Currently the price is right at 200 SMA and EMA on the hourly chart which seems like a good entry point for buying CAD/CHF. The upside target is located at 0.6985 while the stop loss is at 0.6833. This way the 1:2 risk/reward ratio can be achieved and should prevent from exciting the buying trade, in case price will spike lower. Besides, it is quite likely that either 200 SMA or EMA will be tested on the 4H timeframe, which are located at 0.6864 and 0.6857.
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