I missed out on this pair’s long-term channel breakout because I was busy keeping my one good eye on my recent CAD/JPY trade, but I’m still hoping for a pullback on this one!
Long CAD/CHF Idea
Applying the Fib tool on the latest swing high and low shows that the 38.2% Fibonacci retracement level coincides with the broken channel resistance and a former ceiling at the .7500 major psychological mark. Stochastic is already indicating overbought conditions so a correction might be due before CAD/CHF resumes its climb.
I’m bullish on the oil-related Loonie because of the OPEC’s decision to limit production levels for six months starting January next year, as well as the commitment from non-OPEC oil-producing nations to trim their output. U.S. crude oil inventories have been on the decline for the past few weeks, easing oversupply concerns and putting upward pressure on prices.
On the other hand, I’m counting on Swissy weakness as the SNB could continue to emphasize their preference for a lower local currency to shore up export demand and ward off deflation. SNB policymakers are set to announce their interest rate decision in a few hours so I refrained from setting entry orders in anticipation of higher volatility during the event.
Still, I’m keeping close tabs on the short-term rising trend line visible on the 1-hour chart to see if I can catch a quick rally then. Make sure you’re following me on Twitter to get the latest updates!
As always, don’t risk more than 1% of your account on a single trade and make sure you read our risk disclosure if you’re thinking of taking the same setups.
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