From Investor to Scalper is a cycle of analysis in which we take one financial instrument and the analysis includes a detailed look at the value from the monthly/weekly chart to the H1/M15.
CADCHF from November 2011 moved south. For almost three years and more precisely from the memorable “Black Thursday”, when the drastic and unexpected market collapse was caused by the decision of the Swiss National Bank (SNB) to cut interest rates and abandon the fixed EUR / CHF exchange rate at 1.20, as a result 0.7850 support was broken, the market moves in consolidation.
It is worth noting, however, that in July the market overcame the downward trend line. Although, further increases are in doubt. The exchange rate has fluctuated around the upper limit of this consolidation for several months.
If the resistance was permanently defeated, we would expect continuation of increases, for which the potential range could even be around 0.8650.
However, taking in consideration the supply reaction that appeared around this level, it seems more likely that at least a downward correction will come in the near future.
The bearish scenario may also be supported by the fact that the market still did not test (as support) the defeated in July 12th this year a downward trend line, which should be done in accordance with the principle of changing the poles.
For this to happen, however, we would first have to overcome local (blue) support around 0.7620.
Looking at the H4 chart, we notice that declines to be continued, the market would first have to overcome local support, in the area of which a demand reaction appeared yesterday.
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However, given the strength of the current supply reaction rejecting local resistance, these scenarios seem to be very likely. If the price breaks the nearest support, we would expect continuation of declines even to around 0.7615.