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Breakout alert! I’ve got my one good eye locked on this long-term consolidation pattern on CAD/CHF, and the pair has just busted through the resistance.

Long CAD/CHF Idea

The pair has cleared the long-term triangle resistance at the .7700 major psychological level and appears to have completed its retest already. Now this chart pattern spans .6800 to .7800, so the resulting uptrend could last by at least a thousand pips.

CAD/CHF Weekly Forex Chart
CAD/CHF Weekly Forex Chart

Just like del Potro’s win against Federer in the U.S. Open quarterfinals, the BOC interest rate hike this week took me by surprise, but I’m not gonna let that stop me from cashing in on this big move. At the same time, the foreseen reductions in crude oil stockpiles in the upcoming weeks as U.S. Gulf Coast refineries resume operations could also keep the commodity and positively-correlated Loonie supported.

In contrast, data from Switzerland hasn’t been all that impressive recently, and it’s worth noting that the currency tumbled upon seeing weaker than expected quarterly GDP data. SNB foreign currency reserves also ticked slightly higher from 715 billion CHF to 717 billion CHF, keeping traders wary of central bank intervention.

But since it’s already the end of the week and CAD/CHF is moving right around the top of its average range, I’m inclined to be more patient and wait for the next trading week to start before setting any entry orders. I’m not too worried about waiting a bit, either for another quick pullback on profit-taking or more signs of bullish momentum, before hopping in.

Besides, Canada has yet to print its August jobs report and this would likely garner a lot of market attention since the BOC pointed out that they’re keeping close tabs on labor market conditions. I’m also thinking that weekend gaps might materialize if geopolitical risks from North Korea pick up again. I’ll keep y’all posted when I’m able to go long!

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