CAD/CHF gains traction as crude oil soars

• Crude oil jumps more than 2% on Tuesday as Middle-East tensions intensify. 
• CAD/CHF is finding support at the 0.7250 level. 

The CAD/CHF is currently trading at around 0.73169 up 0.63% on Tuesday as the CAD is gaining some strength with crude oil prices soaring more than 2% on Tuesday and breaking out of a triangle pattern which has been more than two months in the makings. Additionally, Canada is not affected by the US tariffs on steel and aluminum which is a relatively favorable point for the currency. Last week, Bank of Canada’s Poloz said that “monetary policy remains particularly data-dependent” and “BoC cannot take a mechanical approach to policy, even though interest rates likely to move higher over time”. 

Coming next on the macro front for the CAD is Deputy Governor C. Wilkins scheduled to speak on Thursday at 18.45 GMT. Retail sales and CPI inflation data are due on Friday at 12.30 and the news is likely to generate volatility in the currency markets. 

The Swiss National Bank Quarterly Bulleting is scheduled on Wednesday at 14.00 GMT and no big surprises should shake the market accrding to analysts.

Earlier in the European session, the market seemed to have largely ignored the Swiss State Secretariat for Economic Affairs (SECO's) latest quarterly economic forecasts which upgraded 2018 Swiss GDP to 2.4% from 2.3% previously and 2019 GDP seen at 2.0%, prior forecast 1.9.

CAD/CHF weekly chart

The CAD/CHF cross is now in its fourth week of trading range bouncing between the 0.7200 and 0.7400 figures. While the RSI is showing some positive divergence the MACD is still indicating a bearish trend.

CAD/CHF daily chart

The daily picture offers a drastically different view with the both the RSI and MACD showing positive divergence as the CAD/CHF is consolidating. Support is seen at 0.7250, which is the low of last week, followed by 0.7220 cyclical low. Resistance is seen initially at the 0.7350figure, followed by the 0.7380-0.7400 region with the 23.8% Fibonacci retracement level from the January-March down move. 

CAD/CHF 1-hour chart

Equally interesting is the 1-hour chart which is pointing out the RSI and MACD positive divergence. If the 0.7320 is broken by the bulls, then next resistance is seen at 0.7340 50% Fibonacci retracement from the March 9-16 bear move; followed by the 0.7360 level at the 61.8% Fibonacci retracement level. To the flip side, if the bulls fail, near-term support is seen at 0.7294 with the 23.6% Fibonacci retracement level; followed by the 0.7250 last swing low.