CAD/CHF: Potential False Breakout Unfolding at Key Support Level

A potential false breakout appears to be unfolding on the Canadian dollar to Swiss franc (CAD/CHF). In the short term, the price is grappling with a critical horizontal support level at 0.6555, marked with an orange line. An initial breakout attempt to the downside, indicated by red lines, failed as the price reversed. However, confirmation of a false breakout would be more convincing if the price closes a daily or H1 candle above the green downtrend line. If this occurs, the target would be the blue downtrend line. The high probability of a positive scenario is suggested by the lack of a significant drop, indicating weak selling pressure.

The current struggle at the key support level indicates a potential change in market sentiment. The false breakout, if confirmed, would suggest that buyers are regaining control, likely pushing the price higher towards the next resistance. The initial failed breakout attempt highlights the importance of patience and waiting for confirmation before making trading decisions.

In summary, while the initial signs are promising for a bullish reversal, traders should watch for further price action above the green downtrend line to confirm the false breakout. If the price closes above this line, the bullish sentiment is reinforced, targeting the blue downtrend line. Otherwise, a failure to break above could lead to renewed bearish pressure.

Source: https://www.axiory.com/analytics/technical-analysis/cad-chf-potential-false-breakout-unfolding-at-key