CADCHF one step from a major trading signal
20 February 2023
In today's analysis, we will be looking at CADCHF, which has been trading in a highly technical manner over the past few months. As shown on the chart, the pair has been in a deep downtrend since the middle of May 2022. This drop has been characterized by bearish waves and occasional bullish corrections. The last three corrections (marked in red) were all flag patterns and resulted in expected breakouts to the downside.
Currently, the pair is forming a symmetrical triangle pattern (marked in black), which is expected to result in a breakout as we approach the end of the pattern. Breakouts from symmetrical triangles typically provide trading signals, and we hope that this will be the case here as well.
Before the triangle pattern formed, CADCHF established a new long-term low at 0.678 (marked in green). It is very possible that the breakout from the triangle will be to the downside, and that the price will test the green area again. This is my base scenario for this instrument. On the other hand, a breakout above the upper line of the triangle would provide a buy signal, but the chances of that happening now are rather limited.