CAD/CHF Forecast Today 26/05: Canadian Dollar

(MENAFN- Daily Forex)

• The Canadian dollar initially pulled back a bit during the trading session on Friday, but it seems like we continue to see a lot of support here right around the 0.5950 level. By bouncing the way we have, we are forming about a 40 pip hammer or so as the market continues to grind sideways in general.
• The 0.60 level sits just above, and it seems to be offering resistance as well.
• At this point, I think a lot of this comes down to risk appetite because if we were to break above the 0.6050 level, then it's very likely that we will go higher.
• You probably see the Swiss franc struggle against multiple other currencies as well in what would be a literal“risk on” move. On the other hand, if we break down below the 0.59 level, that could open up a drop towards the 0.58 level and would probably see the Swiss franc strengthening against multiple other currencies, not just the Canadian dollar. There are lot of concerns when it comes to trade arguments right now. And on Friday, we did see the American president suggest that there would be a 50 % trade tariff thrown on European Union goods.

Will This Situation Cool Down?

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But we'll have to see how that actually plays out. Cooler heads may prevail. We've seen that happen more than once, but it seems like the Americans are rather frustrated with the Europeans and their ability or maybe inability to negotiate a trade deal. All things being equal though, this is a scenario where we see some potential opportunity if we break the 0.6050 level because it would be the market turning around at an extraordinarily low level. One thing is for sure; the Swiss National Bank is one of the first central banks around the world to intervene. And while I don't think they care about the Canadian dollar value to the Swiss franc, they tend to spend more time on the euro and the US dollar. But if they do get involved in some of these other markets, it will have a knock on effect here as well. Very tight trading, but there are two or three levels here we need to watch.

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