The most recent price action shows that CAD/CHF broke below the uptrend trendline while the Fibonacci cycle is pointing out to yet another cycle. It seems like the selling pressure is gradually increasing, which might result in a strong downtrend throughout this week.
As long as the price remains below the key psychological resistance at 0.7000, CAD/CHF is expected to move towards one of the Fibonacci support levels. The final target is located at 0.6785, which corresponds to 327.2% Fibs, applied to the corrective move up after price broke below 50 and . These support levels also correspond to the 78.6% Fibs, as shown on the weekly chart.
Based on the Fibonacci cycles, Fibonacci support, and average-price downtrend trendline, the 0.6785 support could be tested as soon as November 28th because all these indicators are crossing with each other at this date. Therefore, if a downtrend occurs, it could be very strong and a 160 pips downside move could be accomplished in only 5 trading days.
On the other hand, daily break and close above the 0.7000 resistance will immediately invalidate the forecast, and CAD/CHF should be expected to move towards the 0.7050 or above.
Key support levels: 0.6912, 0.6849, 0.6784
Key resistance levels: 0.6987, 0.7000
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
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