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CAD Leads as Oil Prices Rebound, While CHF Pressured by Global Optimism
Forex
Summary:
The CAD/CHF pair continues to fluctuate around 0.6300 with a clear bullish bias. The CAD benefits from Brent crude oil prices recovering to nearly $73/barrel, while the CHF is pressured by positive market sentiment and lack of surprises in European economic data. With expectations of OPEC+ continuing to maintain production cuts, the CAD may find further support in the coming period...
Buy
TradingCADCHF
EXP
0.63055
Entry Price
0.63400
TP
0.62700
SL
0.63058 +0.00077 +0.12%
0
Point
Flat
0.62700
SL
CLOSING
0.63055
Entry Price
0.63400
TP
The CAD/CHF pair is showing a solid upward trend on December 3. Brent crude oil, one of the factors that determine the strength of the CAD, rose to $72.80/barrel, supported by expectations that OPEC+ will continue to tighten supply to stabilize the oil market. Rising oil prices not only strengthen Canada's foreign exchange earnings from oil exports but also support the domestic economy thanks to increased production.
Meanwhile, the CHF struggled as PMI data from the Eurozone showed stability but was not enough to boost the CHF. Optimism about the European Central Bank's (ECB) stimulus measures also reduced demand for safe-haven assets. Markets are focused on expectations that the Swiss National Bank (SNB) policy meeting will not bring any major changes, reinforcing the bearish view on the CHF.
Market sentiment
Global investor sentiment improved significantly in the first trading session of the week, with the VIX index (a measure of market volatility) falling to 13, its lowest level since early November. Investors are moving away from defensive assets such as the CHF and into commodity-linked currencies such as the CAD. CAD trading volumes have also increased significantly, especially on European exchanges, as investors poured money into oil markets.
Moreover, Canadian employment data last week beat expectations, with 24,000 new jobs added compared to the forecast of 15,000, further bolstering confidence in the country's economic recovery. In contrast, Switzerland reported a 0.3% increase in Q3 GDP, below expectations of 0.5%, weakening the appeal of CHF.
Technical Analysis
The M30 chart shows that CAD/CHF is maintaining a steady uptrend. The price has broken above the 20- and 50-period moving averages, indicating strong buying pressure. The Bollinger Bands are showing signs of widening, signaling the possibility of higher price volatility in the coming period. The current support level is at 0.6280, while the important resistance level is at 0.6320.
The Stochastic indicator is currently at 79/80, approaching the overbought zone but showing no signs of a reversal yet. The Stoch line has crossed above the signal line, reinforcing the uptrend. At the same time, the Ichimoku cloud continues to act as strong support, with the price above the Senkou Span A line.
Trading Recommendation
Entry: Buy at 0.6305,with the expectation that the price will continue to break the resistance.
Take Profit: 0.6340, where there is a large potential selling pressure.
Stop Loss: 0.6270, below the nearest support zone.
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