- The Canadian dollar has plunged against the Swiss franc during trading on Monday as we are testing a pretty significant low in the form of the 0.5840 region.
- That being said, I think there’s probably more technical support near 0.58 below.
- We have to ask the question whether or not the market can continue to really fall at this rate.
In general, I think this is a situation where the market participants have gotten a little bit ahead of themselves. And I think we could see a bit of a bounce. This will be especially true if the Swiss start to lose their sense of humor with this.
All things being equal though, we cannot be buyers of this market just simply because it is so negative. There will eventually be a significant rally. If nothing else other than a “dead cat bounce”, I think this shows signs of help. And the one thing that I think you could pay close attention to is the fact that oil doesn’t seem to care that the rest of the world’s on fire. So, if that continues to be the case and we get some type of good news, there is the possibility that the Canadian dollar does gain ground against the Swiss franc.
On the Other Hand…
Alternatively, if we were to break down below this crucial 0.58 level, we are at such extreme lows, you really don’t know where you could end up. I would anticipate you would look towards each large handle on the way down, so the next target might be 0.57, but you also have to pay attention to the way the US dollar is trading against the Canadian dollar because as we know, the Swiss franc is strong due to all of the fear, and Canada has its own set of issues with the tariff wars with America. So, this is an interesting pair to watch. We are in an area that you would think could offer a bit of support, but you need some good news to get this thing ripping to the upside.
Want to trade our daily forex analysis and predictions? Here’s a list of the best FX brokers in Switzerland to check out.