Previously we had few CHF related ideas, on AUD/CHF and NZD/CHF. All of them are pointing out in the direction of the weak Swiss Frank, and CAD/CHF is not an exception.
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:
Key support levels: 0.6983, 0.6975
Key resistance levels:0.7035, 0.7077
On the 1-hour chart, CAD/CHF has formed a triangle pattern, where 0.6980 support area was rejected multiple times. While the support was respected the downtrend trendline or the triangle was broken to the upside, suggesting an upcoming wave north.
The key resistance is located at 0.7077, which is confirmed by two Fibonacci retracement levels. Firs being the 88.6% Fibs applied to the last wave down occurred between 10-11 June. The second is 261.8% Fibs applied to the downside correction prior to the triangle break. This makes it a potential 80 pip price increase, which can be expected within the next 24-48 hours. It is because the upside target crosses with the long term uptrend trendline in the next 24 hour period.
Potential Trade Idea:
The ideal entry point could be at 0.7000 because it is a strong psychological support level and the potential demand area for bulls. Therefore, as long as the price is between 0.6985 and 0.7000, buying opportunity will be open. Although if there will be daily close below the 0.6975, the bullish outlook will be invalidated and the price could be reversing to the downside. But the hard stop loss can be placed at 0.6964 which will provide a 1:2 (or better) Risk/Reward ratio.