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CAD/CHF hits the top of today’s watchlist as the downtrend could see further volatility with more oil inventory updates ahead.

Before moving on, ICYMI, today’s Daily London Session Watchlist looked at an opportunity forming on GBP/USD ahead of U.K. data, so be sure to check that out to see if there is still a potential play!

Intermarket Snapshot

Equity Markets Bond Yields Commodities & Crypto
DAX: 12621.96 -1.39%
FTSE: 6153.69 -0.36%
S&P 500: 3163.03 +0.25%
DJIA: 26321.35 +0.90%
US 10-yr 0.61%  -0.03
Bund 10-YR -0.435% -0.028
UK 10-YR: 0.152% -0.034
JPN 10-YR: 0.025% -0.003
Oil: 40.21 +0.27%
Gold: 1810.10 -0.22%
Bitcoin:9212.75 -0.24%
Ethereum: 239.75 +0.09%

Fresh Market Headlines & Economic Data:

U.S. consumer price index rose by 0.6% in June vs. 0.5% expected

The NFIB Small Business Optimism Index stood at 100.6 in June, a 6.2 points increase compared with May

U.K. GDP expanded by 1.8% in May on the month, below expectations of 5.5% m/m rebound

Industrial production up by 12.4% in euro area and 11.4% in EU

German economic expectations fell in July, ZEW survey finds

Swiss National Bank says expansive policy ‘more necessary than ever’

Asia ramps up coronavirus curbs as new clusters erupt

Upcoming Potential Catalysts on the Economic Calendar for U.S. & Asia:

Fed Brainard speech at 6:00 pm GMT
Fed Bullard speech at 6:30 pm GMT
API Crude oil stock change at 8:30 pm GMT
Japan Reuters Tankan Index at 11:00 pm GMT
Australia New Home sales, Consumer confidence at 12:30 am GMT (July 15)
Bank of Japan Quarterly Outlook & Interest Rate decision at 3:00 am GMT (July 15)

What to Watch: CAD/CHF

CAD/CHF 1-Hour Forex Chart
CAD/CHF 1-Hour Forex Chart

We’ve got a risk aversion lean in global markets today, and with oil inventory data ahead in the upcoming Asia session, that makes the recent downtrend in CAD/CHF one to watch for potential short-term opportunities.

On the one hour chart above, we can see a clear down-trending pattern of lower ‘highs’ and lower ‘lows’, indicating the solid control the bears have over CAD/CHF. And in today’s trading session, the strong support area around the 0.6920 handle was convincingly broken as both fears of OPEC production cuts are priced into the Canadian dollar, as well as a broad shift in global risk sentiment towards negative.

So, the bears have the edge in this pair, and any retest of the broken support area around 0.6920 should be considered for a short position, especially if we see another rise in crude oil inventories and if we get another technical overbought signal from the Stochastic indicator. This combo will likely draw in sellers if the overall risk environment remains negative.

For the bulls, it’s possible we may see short-term support around the 0.6885 level, which was a bullish reversal level back in early May. If the broad risk environment shifts back to positive and/or oil inventories drop, then an argument could be made for a very short-term long position.

With a daily ATR of around 45 pips, the falling ‘highs’ pattern is a reachable target within a session with the right catalysts, but again, this long bias is against the trend so those catalysts would have to be pretty strong to make the position worth the risk.