CAD/CHF Targets Higher Levels After Breaking Above Downward Channel

Market Overview

The Swiss franc is trading cautiously ahead of the Swiss National Bank’s (SNB) decision to cut interest rates to 1%. A potential rate cut could weaken the franc, making it less attractive for investors. Meanwhile, rising oil prices continue to provide broad support for the Canadian dollar, as Canada’s oil-dependent economy benefits from stronger crude demand. As a result, the four-month downtrend in CAD/CHF appears to be undergoing a corrective rebound, supported by these fundamental shifts.

Technical Analysis

On the four-hour chart, CAD/CHF has seen increasing buying momentum, helping the pair break out of its short-term downward channel. Buyers are currently attempting to push the price above a key resistance level at 0.62997. Should they succeed in breaking this level, the next target will be the resistance zone between 0.63444 and 0.63664. If bullish momentum continues, the pair may reach higher targets at 0.64076 and 0.64523.

However, if buyers fail to sustain the breakout, the pair could retrace toward support levels at 0.62458 and 0.61918.

Alternative Scenario

If the price fails to hold above 0.62997, sellers may regain control, pushing the pair back down toward the key support levels at 0.62458 and 0.61918. A breakdown below these levels would invalidate the bullish outlook in the short term.

Key Levels Overview

• Resistance Levels:
  • Resistance 1: 0.63444
  • Resistance 2: 0.63664
  • Resistance 3: 0.64076
  • Resistance 4: 0.64523
• Current Price: 0.63008
• Support Levels:
  • Support 1: 0.62997
  • Support 2: 0.62458
  • Support 3: 0.61918

Key Events to Watch

The SNB’s interest rate decision on Thursday is the most significant event driving this pair. Investors will also pay close attention to the press conference with the SNB chairman, seeking insights into the central bank’s future monetary policy direction, especially regarding further stimulus measures. On the Canadian side, factory sales and average weekly earnings data are due for release, which could further influence the CAD/CHF pair depending on the results.

Conclusion

CAD/CHF is poised for further upside if buyers can successfully break above 0.62997, with potential targets at 0.63444 and 0.63664. However, failure to maintain momentum could see the pair retracing back to key supports at 0.62458 and 0.61918. After the SNB rate cut decision, its press conference and economic data from both Switzerland and Canada will likely shape the near-term direction of this pair.

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