CAD/CHF – A Double Top & Strong Resistance Bounce
|If we look at the daily chart of CADCHF, we can see the completion of a double top reversal pattern, which has formed immediately after the resistance level 0.76208 was rejected. This downward move is likely to continue in the short term as Tenkan Sen is sloping downwards suggesting there is some strong momentum behind the move. It is worth noting that Senkou Span A and Senkou Span B are diverging indicating a thicker future Kumo could potentially form providing much more significant support by the Kumo which could oppose the downward movement. Senkou Span B remains flat indicating significant support at this price level.
Looking at the 4-hour chart of CADCHF we can see that the price has broken and closed below the Kumo and Tenkan Sen indicating a bearish outlook. However, we can see that the Chikou Span is firmly within price suggesting that we are likely to see price range. A short position is only favoured to price level 0.75500 in the short-term. It is unlikely that we will see the price in a downward trend until there is a bearish Kumo breakout on the daily chart.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.