CAD/CHF just bounced from a major support zone!
Will the area continue to drive away Loonie sellers?
Or will the 4th time be the charm for the bears?
CAD/CHF 4-hour Forex Chart Faster with TradingView
The Canadian dollar picked up some pips on Wednesday after the Bank of Canada kept policy unchanged, as expected. That support faded soon after, though, as traders appeared to price in signals that the March meeting is still live for a possible rate cut.
Meanwhile, the Swiss franc gave up a pip or two against majors like the U.S. dollar as greenback demand firmed following Fed Chairman Powell’s balanced remarks.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Swiss franc and the Canadian dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
What makes CAD/CHF interesting today is the series of long bearish wicks showing up around key retracement levels.
A rejection near .5680 would signal a failure at the S1 Pivot Point, which lines up with the 50% Fibonacci retracement of the recent downswing. A bearish turn from higher levels like the .5700 psychological handle would instead suggest that the trend line resistance in place since mid-January is still doing its job.
Either scenario opens the door for another retest of the major support zone near .5600. Sustained trading below that area could expose CAD/CHF to a deeper slide toward multi-year lows.
On the flip side, holding above the recent bearish candlesticks could invite renewed buying interest and lift the pair toward higher inflection points near .5700 and the .5760 previous area of interest.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
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