- The Canadian dollar continues to threaten this little area here at about 0.5950 against the Swiss franc.
- This for me is a bit of a sign about the overall risk appetite around the world.
- Ultimately, this is a scenario where I think a lot of traders will look at this through the prism of back and forth range bound trading.
At the very least it’s probably worth having a go here considering just how much you have in the way of resistance above. And ultimately, I do think that’s probably what most people are looking at with the pattern being so clean and obvious since basically April 25th, one would assume that we get more of the same. Now, having said that, we are most certainly in a downtrend. So, I recognize that eventually we’ll have to resolve this area. And one would assume that it favors the downside, but we saw a massive entry candle to this range back on April 22nd. So, we’ll see if we can continue to the same kind of action in this currency pair.
On a Move Lower
If we break above the 0.6050 level, then it becomes a very big risk on signal, not only here, but around the world. If we do take off to the upside of the 200 day, EMA would be your target. A little bit of a bounce might be worth for short-term traders to look into, but if we break down below the couple of hammers that test the support just below, then I think a move to the 0.5850 level is probably more likely than not. This does tend to be a slow moving pair, so it gives you plenty of time to enter your positions and set up your potential trades.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
