CADCHF has moved south since November 2011. For almost two years, and more precisely from the memorable “Black Thursday,” when the drastic and unexpected collapse of the market caused by the decision of Swiss National Bank (SNB) to cut interest rates and to abandon the rigid EUR/CHF exchange rate at 1.20, market broke support at 0.7850 and moves in consolidation.
It is also worth noting how precisely the downward trend line is being tested which has been blocking buyers for months before further growth.
On weekly chart we see that market has been moving for a long time in consolidation. Taking into account the fact that it is a correction of time relative to previous falls, it seems more likely to be broken thru bottom. It is worth noting, however, that the current horizontal trend lasts already for over two years and that a possible break-up is rather vainly expected in the near future.
Looking at the H4 we notice that market has been moving for two weeks in consolidation, with its lower limit in 38.2% of Fibonacci correction from previous increases.
In this consolidation a smaller box was formed last week. Today in the area of its upper limit, which coincides with the 70.7% Fibonacci correction from previous falls, there has been a strong supply reaction.
As a consequence of later drops, market beat local support at 0.7322, which re-test and rejection from below could signal continuation of declines.
However, it should be noted that current correction has formed a consolidation. As a result of this, the 0.7322 re-test may not happen and if market breaks the bottom of current box, we could expect continuation of declines.
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