CADCHF: Tested Trend Continues

CAD/CHF – Charts & Analysis

As of writing: Strength Vs Weakness Tables Standings

• CAD is showing S3 and S3 (Strong) on the Trend and Day trading tables respectively
• CHF is showing W1 and W2 (Weak) on the Trend and Day trading tables respectively

Link to LIVE/Rolling Strong/Weak Tables HERE

Observations:

• The Daily chart above shows:
  • A confirmed uptrend, anchored 12th April, formed 26th April and 11th May ’22
  • This trend has broken through resistance at 0.7475 and since returned 275 pips
  • Prior resistance at 0.7700 was breached on 13th April ’22
  • Above current price we see:
    • Minor resistance circa 0.7850
    • Major resistance circa 0.7900

• ADX: Shows buyers retaining the upper hand with a healthy trend strength in support
• Stochastic: Whilst buying momentum is strong (80+) we see momentum stalling, indicating a pullback

Observations:

• The 8 Hour chart above shows:
  • Again the proximity of current price to the 0.77 support and 0.7850 resistance handles
  • The addition of a bullish Fibonacci Retracement tool shows the possible 38% and 50% retracement levels circa 0.7740 and 0.7715 respectively
• ADX: Again we see buyers in control, with again a solid trend strength indication
• Stochastics: Always more sensitive, particularly on the lower timeframes, indicates recent selling momentum with buyers now re-entering the market

Current Narrative:

• The current narrative is clearly to the upside, with buyers in control of the daily and 8 hour charts
• The existing bull trend and channel remain intact
• Strength Vs Weakness Tables:
  • I have sight of our proprietary multi-timeframe strength Vs Weakness tables and can confirm that:
    • CAD is showing in the top 3 strong currencies on every timeframe
    • CHF is showing in the top 3 weak currencies across the board

My Trade Plan:

• Given the above I am looking to enter long this pair
• To do so safely I am waiting for price to retrace back to trend
• Ideally this would be circa Fib 50% (0.7715 where I have a current buy order) with a stop below trend support and the Fib 62% level
• Target wise I am eyeing a partial exit circa minor resistance @ 0.7850 and a full exit circa Major resistance @ 0.7900 where I perceive there to be the potential for extensive profit taking
• I am not too fussed if this order is not triggered as I’d rather miss the train than find myself on the wrong train heading in the wrong direction altogether.

Strength/Weakness Caveat:

• A removal of either of these currencies from my S/W Trading Tables (HERE) would of course negate this entire trade plan