CAD/CHF stalling at resistance ahead of Canadian CPI and Retail Sales
- Canadian CPI and Retail Sales are scheduled on Friday at 13.30 GMT.
- CAD/CHF is in a compression pattern on the daily chart.
The CAD/CHF cross is trading at around 0.7351 as Trump announced that he would impose tariffs on China worth $50-60 billion. China promised they would retaliate imposing tariffs as well on US goods, with escalating tensions about a trade word undermining financial markets.
CAD/CHF daily chart:
The CAD/CHF has formed a double bottom at the 0.7250 level and in the last four days, the cross gained almost 2%. While both the RSI and the MACD indicators are displaying a positive divergence there is still no significant bull run that would confirm that the bull reversal has taken place just yet. However, sellers have only owned the market on March 12 and 13 with only two significant bear days, but after that, it was mainly buyers buying the dip which lead to the bull breakout of the last 3 days of trading. Technically the CAD/CHF has found resistance at the trendline after a three-day jump.
Tomorrow will see Canadian CPI and retail sales releases. Any deviation can lead to a rather big reaction. A negative or neutral reading could see the cross back to 0.7300 support or even to 0.7250 in the coming days. On the flip side, if the bulls win, resistance is seen at 0.7430 previous swing high, followed by the 0.7550 supply zone. No Swiss macro-data is expected in the next 24 hours. Also worth noting is the potential wedge formation which is taking shape in the daily chart.
CAD/CHF 1-hour chart:
The 1-hour chart is displaying an expanding triangle formation which often leads to substantial move once the pattern is broken. MACD would suggest that a correction down is underway.