(
MENAFN- Daily Forex) Potential signal:
- On a break above the 0.64 level I am a buyer with a stop loss at the 0.63 level.
- I would be looking to reach the 0.6750 level.
The Canadian dollar initially pulled back just a bit during the trading session on Tuesday but then turned around to show signs of life. The market is currently hanging around the 200-day EMA, which in and of itself will cause a certain amount of interest. But when I look at this chart, I also recognize that it is a market that has been consolidating for some time. What I find interesting is that a couple of weeks ago, we ended up forming a massively bullish candlestick after the initial gap lower due to tariffs being announced by the United States. And we have rallied quite nicely since then. I think at this point in time, most traders are willing to sleepwalk past the idea that the United States might still slap tariffs on Canada.
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On the other side of this, currency pair, you have the Swiss franc, which of course is suffering at the hands of ultra loose monetary policy that's probably only going to get worse as Switzerland unfortunately sends most of its exports into the European Union, thereby making it very difficult for them to deal with monetary policy as they are surrounded by a very weak neighbor.
All things being equal, we have been consolidating between 0.62 on the bottom and 0.64 on the top. This suggests that if we could get a daily close above the 0.64 level, there should be a two-handle move just waiting to happen. That sends this pair looking to the 0.66 level. However, in the short term, it looks very noisy, it looks very back and forth, and it and it seems as if we are going to continue to see a lot of choppy behavior. It does look like we're starting to lean higher though. So that might be something worth paying attention to as a sign of where we may eventually break.
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