Hello traders! Since CAD/CHF has tested 0.6746 low, the price has been on the rise, and higher highs, as well as higher lows, were produced. Price remains above the 50 Exponential Moving Average and after breaking above the descending channel price corrected down and rejected the EMA along with the upper trendline of the channel.
Overall, currently, price is facing a strong support area near 0.6865, which might result in the continuation of the uptrend starting today or early next week. CAD/CHF has almost reached the uptrend trendline and it is possible that the trendline will be tested before/if uptrend will continue.
In regards to the upside potential, the key resistance is located at 0.6985, which is 120 pips away from the current market price. The resistance is confirmed by two Fibonacci retracement levels. First is the 38.2% Fibs applied to the corrective wave up after price rejected the 50 EMA back in June 2020. The second is 727.2% Fibs applied to the corrective wave down after prie broke above the downtrend trendline on the August 10. Besides, the resistance is also going inline with the long term downtrend trendline, suggesting that this might be a point of extreme supply.
On the downside, daily break and close below the 0.6865 support can invalidate bullish scenario and most probably pair will enter a longer-term consolidation phase with a small risk for moving down strongly.
Bias: Strongly bullish while above 0.6855
Potential Support Zone: 0.6855 – 0.6875
Potential Targets: 06985
Have a profitable trading!