Today I’m eyeing CAD/CHF as the pair is poised to resume its uptrend, potentially with help from the Swiss National Bank tomorrow. Are more buyers waiting for resistance break before jumping back in?
CAD/CHF Resistance Break Soon?
As mentioned above, CAD/CHF looks poised to break above a minor resistance area (around the 0.7475 handle) that’s momentarily slowed the longer-term trend higher, which goes back to the end of January 2021.
Fundamentally, the arguments for this bias is similar to my EUR/CAD watchlist post this week as my broad market and Canadian outlook hasn’t changed, and since the Swiss franc often trades in tandem with the the euro.
What’s different though, at least for this week, is that the Swiss National Bank will be giving its latest monetary policy statement tomorrow at 8:30 am GMT. Expectations are for no actual changes to policy, especially with the Swiss franc weakening in 2021 as they would like.
As long as we get no changes from the SNB and the global markets continue to lean bullish in broad risk sentiment, odds are pretty good that CAD/CHF will continue its rally in the short and medium terms. Traders should watch for a solid break / hold / bullish reversal patterns before considering a fresh long position in this scenario.
Of course, if we get a surprise from the SNB in the form of hawkish comments (very low probability at the moment) and continue to get weakening oil prices (which has dragged the Loonie lower recently) then the odds of success weakens. So be on the lookout for covid vaccine/case developments in Europe as that has been the driving catalyst for oil prices / risk sentiment in recent weeks.
What do you all think? Are you watching EUR/CHF for a fresh move higher? Do you think the SNB will surprise the markets tomorrow? Let me know in the comments section below!
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