CAD/CHF – A Double Top & Strong Resistance Bounce

Sachin Kotecha Sach Capital Limited

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.

Author

Sachin Kotecha

Sach Capital Limited

Sachin Kotecha started currency trading in 2005 whilst at University studying Mechanical Engineering. Sachin continued trading whilst going on to do a Master/PhD in Engineering and trading part time whilst being employed as a University Academic.

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