Hello traders! The CAD/CHF could be starting to feel weak due to the price drop of the USOil, which is correlated to the Canadian Dollar. At the same time, the price of Gold seems to be very bullish in the medium term, which might suggest the strength of the CHF. These two factors might affect the CAD/CHF, while the price can be expected to fall by over 200 pips.
Technically, the pair broke below the downtrend trendline after 61.8% Fibs at 0.6951 was rejected cleanly. Then CAD/CHF corrected up and bounced off the trendline, which this time acted as the resistance, as well as 50 Exponential Moving Average. Lower lows and lower highs are starting to appear, suggesting the validity of the downtrend.
If such a tendency will continue, CAD/CHF can be expected to move down, towards the 0.6777 support, which is confirmed by 88.6% and 327.2% Fibonacci retracement levels.
On the upside potential, only a break above 0.6977 will completely invalidate the bearish forecast and the pair should initiate a long-term uptrend.
Bias: Strongly bearish while below 0.6952
Potential Resistance Zone: 0.6900 – 0.6925
Potential Targets: 0.6777
Have a profitable trading!