As the Oil priced rallied last week there was the inevitable ripple effect out to the CAD and other major oil producers. However, that rally started show signs of rolling over as the week closed and and USOil could not hold north of $50.00 per barrel. That suggested a scan of the CAD pairs and two in particular looked interesting; CADCHF and AUDCAD.
CADCHF perhaps not a cross that appears on many watch lists, however, it was of interest because of a combination of factors. The 300 pip September move down from the high at 0.7613 to 0.7304, was retraced to the 38.2 Fibonacci level within a few days. However, that level (0.7420) coincides with the 200 DMA level and has proved a very strong resistance to a move back higher. The strong shooting star candle on Tuesday and the reversal in Oil prices on Friday, even with the good Canadian job creation figures, meant the pair closed down on a strong candle once again below the 20 DMA. A SHORT position was opened at 0.7370 with a short term target 1 at the lower Bollinger band and a little less than the 14 ATR at 0.7335. In the higher time frames the pair remains in down trends on the Weekly and Monthly charts and target 2 is at the April low of 0.7250.
Comments over the weekend from the Swiss National Banks Chairman, Thomas Jordan, also added to the mix. He said that the central bank can cut rates further if needed and that they have “some room to go further if necessary”. He said the SNB’s current policy “makes sense and is appropriate for the foreseeable future”, adding that negative rates are making sense for Switzerland as there is ” a lot of evidence that the exchange rate channel is working”.
The AUDCAD had a similar but negatively correlated move to the CADCHF on Friday and a close above 1.0055 –1.0070 could be of interest for further investigation.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register the next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.