CAD/CHF appears to be in correction mode, as the pair is closing in on the broken support zone near Fib retracement levels.
Will it hold as resistance this time?
Better keep tabs on these inflection points on the 4-hour time frame!
CAD/CHF 4-hour Forex Chart Faster with TradingView
The Loonie continues to draw support from the not-too-dovish Bank of Canada (BOC) decision earlier this week, pulling up from its recent dive to test the Fibonacci retracement levels.
The pair is hovering around the 38.2% Fib just above S1 (.5670) but could still go for a higher correction to the 61.8% level that’s closer to the pivot point (.5720) and a former support zone.
Are sellers just waiting to hop in soon?
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!
The 100 SMA is still below the 200 SMA to suggest that the path of least resistance is to the downside, possibly sending CAD/CHF back down to the swing low near the .5600 handle or to fresh ones closer to S3 (.5580).
Just be sure to look out for long green candlesticks closing above the area of interest, as a break higher could take the pair up to the resistance zone around R1 (.5750) then the January highs near R2 (.5800) and a major psychological level.
Canada has its monthly GDP release lined up before the week comes to a close, likely bringing directional flows for the Loonie, depending on the outcome of the report. Meanwhile, there’s not much in the way of top-tier catalysts for the franc, leaving overall risk sentiment as the main driver of price action.
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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