Hello traders! CAD/CHF has been trending down throughout this week. But the most recent price action shows that there was a clear rejection of the 78.6% Fibonacci retracement level at 0.6931. After the bounce, the price went up and broke above the downtrend trendline and then above the 200 Exponential Moving Average.
Quite a bullish price action up until now, but this is not all. We can also see the formation of the Inverted Head and Shoulders pattern with a clear break above the neckline. This is yet another strong bullish confirmation for the CAD/CHF.
After breaking above the neckline, trendline, and 200 EMA, the price corrected down, and currently is rejecting the downtrend trendline, which is acting as the support. Perhaps while price remains near 0.6490 area, buyers could be starting to step in, considering multiple signs of a bullish trend. The upside target is seen at 0.6973 – 23.6% Fibs, which would complete the H&S reversal pattern.
Although the price might also attempt to break below the right shoulder and the 78.6% Fibs at 0.6931. But only daily break and close below this level will completely invalidate upside scenario and the downtrend continuation can be expected.
Bias: Strongly bullish while above 0.6931
Potential Support Zone: 0.6920 – 0.6940
Potential Targets: 0.6973
Have a profitable trading!