Hello traders! Today CAD/CHF has formed a double top at 0.6983. This resistance level corresponds to the 127.2% Fibonacci retracement applied to the corrective wave down after breaking above the 50 Exponential Moving Average. As we can see, it was a very clean bounce and currently, price is struggling to break above.
Back on April 13, this level was nearly tested and clearly acted as the resistance, suggesting the importance of this price. This could mean, that as long as the resistance is holding with no 1h and 4h close above, CAD/CHF should be expected to initiate a correctional move to the downside.
There are two major support levels to watch if the price will start going down. The fist is 23.6% Fibs at 0.6942, and the second is 61.8% Fibs at 0.6873. Both of them correspond to the support trendlines of the ascending extended channel, the middle trendline, and the lower trendline.
While at this point it only seems like an upcoming correction, it could eventually turn out into the long term downtrend continuation. Thus making the current price extremely attractive for short and long term traders.
In regards to the upside potential, of course, it is possible that CAD/CHF will break to the upside. If we’ll see 1h and 4h closing price above the 0.6983, this will invalidate bearish outlook and could result in the impulsive move to the upside.
Bias: Bearish while below 0.6983
Potential Resistance Zone: 0.6983 – 0.7000
Potential Targets: 0.6942, 0.6873, 0.6804
Have a profitable trading!