{"id":3410,"date":"2024-07-05T09:34:33","date_gmt":"2024-07-05T09:34:33","guid":{"rendered":"https:\/\/alchemymarkets.com\/?post_type=market_insights&p=3410"},"modified":"2025-05-15T06:32:30","modified_gmt":"2025-05-15T06:32:30","slug":"cadchf-july-5th-2024","status":"publish","type":"market_insights","link":"https:\/\/alchemymarkets.com\/it\/education\/market-insights\/chart-of-the-day\/cadchf-july-5th-2024\/","title":{"rendered":"CADCHF Analysis (July 5th, 2024): Drop Before Rise Possible"},"content":{"rendered":"\n
In a few hours time at 12:30 UTC, the Canadian Employment Change and Unemployment Rate data will be released, which could catalyse a move on CADCHF to the upside or downside.<\/p>\n\n\n\n
The pair is currently trading at a resistance zone with the 4H ADX slowing down, suggesting a pause in bullish momentum and potentially peaking. Technically, this makes the \u201cDrop before a rise\u201d scenario more probable on the CADCHF pair.<\/p>\n\n\n\n
Fundamentally though, if the employment change data is higher than anticipated, we could see a rise in CADCHF after what essentially has been a consolidation for the entire week.<\/p>\n\n\n\n
Technical Analysis on CADCHF (July 5th, 2024)<\/h2>\n\n\n\n
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On the 4H timeframe, the CADCHF pair is currently trading in an area where prices previously consolidated in April and May. Having moved into this zone from a lower price, it now acts as a resistance. The 4H ADX is also around 50, a level that CADCHF has tested and subsequently fallen from in the past.<\/p>\n\n\n\n
If a rejection occurs, I would target the point of control at 0.65133 Francs. The absence of significant trading volume before this area suggests that a drop could be swift and smooth. From there, I would expect the POC to provide a bullish reaction, potentially giving CADCHF the strength to climb back up.<\/p>\n\n\n\n
Alternatively, if CADCHF simply breaks the resistance zone, we could keep an eye on the significant area of approximately 0.66800. However, a push up from here may be challenging, as the Volume Profile shows there was moderate trading volume above the current area of 0.66040.<\/p>\n\n\n\n
About the News Release<\/h2>\n\n\n\n
Ultimately, the CADCHF pair has been stagnant throughout the entire week, seemingly awaiting the employment data release.<\/p>\n\n\n\n
If the data for Employment Change comes in higher than expected, it indicates a strong labor market, which is generally positive for the Canadian Dollar (CAD).<\/p>\n\n\n\n
If the Unemployment Rate is lower than expected, it also signals a strong labor market, further supporting the Canadian Dollar.<\/p>\n\n\n\n
Combined, this could then fuel CADCHF to continue its upward momentum. However, the technicals currently do not provide me with the confidence to take a long trade at the resistance zone.<\/p>\n\n\n\n
Bearish Scenario for CADCHF:<\/h3>\n\n\n\n
In the event that Employment Change comes in lower, and Unemployment Rate comes in higher<\/strong>, the fundamentals and technicals would align for a short position, bringing us down to potentially the consolidation zone of 0.65300 – 0.65000 Francs.<\/p>\n\n\n\n
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