The uptrend in CAD/CHF slowed down last week, but could the bulls get the train going again this week?
CAD/CHF Uptrend Pullback
On the one hour chart above of CAD/CHF, we can see the bulls have recently taken this pair from 0.7370 to 0.7530, mainly lifted by positive economic updates by Canada and broad risk-on sentiment. But over the last two sessions, price action has stalled around the 0.7500 major psychological handle, and looks like it’s in the process of a short-term pullback. Is this another buying opportunity for the bulls?
If broad risk sentiment continues to lean positive this week, we’d say the odds are pretty good that CAD bulls will hop in on the longer-term trend higher, especially with expectations that the upcoming Canadian employment update will signal a continued jobs recovery in March.
So, we’re watching and hoping for a pullback in CAD/CHF, ideally to the previous strong area of interest around the 0.7350 area. If the market holds there with bullish reversal candles developing ahead of the Canadian data on Friday, then we’ll consider a long position.
We’ll also be on the lookout to see what oil is doing this week as it tends to be a strong influence on the Canadian dollar. Oil demand concerns have risen in recent weeks, but if that narrative fades and/or covid developments lean positive, oil could have a chance to rally this week. So, if the bulls continue to hold the $58 – $59 area / rally from this area on WTI crude, that strengthens the bullish argument on CAD.
What do you all think? Are you watching CAD/CHF for potentially deeper pullback and then support? Or do you think the rally is done for now and there’s further room to go lower? Let me know in the comments section below!
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