DAILY CHART ANALYSIS OF CADCHF Technical study of CADCHF reveals that the pair has moved from a previously sideways to a bullish phase and is now in a clear downtrend correction followed by consolidation. Initially, CADCHF tried to gain momentum above the 0.5750 level but did not manage to hold the higher levels, which led to a sharp bearish move. That rejection is the start of the price pattern shift, as the graph now shows the price making lower highs and lower lows. The momentum of the fall was such that the drop distance was indicative of the sellers dominance over short-term direction. The move down was by far the strongest through the 0.5740 to 0.5750 supply zone and brought the price down quite fast to the 0.5600 base. CADCHF made a big impulsive bearish leg, which is the main one used for Fibonacci measurement. This price action determined 0.5600 as a significant demand level since the price bounced at the level immediately after the drop. The presence of long lower wicks at that level is a sign of the market getting into the buying side in a protective way. After touching 0.5600, CADCHF stopped moving in the direction of the trend and went into a consolidation phase, during which a symmetrical triangle pattern was formed. This pattern indicates that buyers and sellers are evenly matched after the strong downward move. The price is now oscillating within a range with ever-decreasing amplitude, which is a sign of accumulation, not continuation of selling. By staying above the lows, CADCHF implies that the selling pressure is diminishing, although the revival is restrained. Retracement markings on the Fibonacci tool can easily clarify the corrections after a single top and bottom. The tool was applied from the swing high near 0.5755 down to the swing low around 0.5600. The 23.6% level of the Fibonacci return from 0.5600 to 0.5755 is located near 0.5635, and it is currently providing resistance. CADCHF has tried to break this resistance level several times, but so far it has failed to hold any breakout above it. This indicates that there are sellers even at the very shallow retracement levels. The 38.2% Fibonacci retracement point is at about 0.5660, which is in very close proximity to the upper boundary of the consolidation structure. This level is a significant resistance for the first recovery, and therefore, it also serves as a technical pivot area. Should CADCHF be able to close above 0.5660, it will be seen as buyers who are trying to reverse the corrective phase. Hence, before that, the market is considered neutral to slightly bearish with the presence of the range conditions. The 50% Fibonacci retracement has been identified near the 0.5680 level, which is also in line with the previous breakdown structure. This median level is crucial as it usually distinguishes a correction from a reversal. CADCHF will have to go back to and stay above 0.5680 to be able to confirm a change in the structure towards a bullish trend. However, if the level is not breached, then the continuation of the bigger consolidation would be supported by the failure at this level. The 61.8% Fibonacci retracement level is around the 0.5700 mark, which is considered the most significant resistance within the retracement ladder. This area also meets the descending trendline resistance drawn from the January highs, making it a confluence barrier. An advance toward 0.5700 would probably result in renewed selling pressure unless it is backed by strong bullish momentum. For CADCHF to negate the previous bearish move, it has to get past this level. After this point, the region near 0.5750 is still the main structural resistance that has capped the earlier rise. This area is where the initial selloff took place and, thus, carries strong supply identification. Any movement back to 0.5750 would mean a complete retracement of the bearish leg rather than just a correction. On the flipside, 0.5600 is still serving as the main support level and the base of liquidity. A smooth move below 0.5600 would continue the bearish trend and reveal lower extension levels around 0.5550. CADCHF being above this support means that the market is technically stabilizing rather than heading downward. The narrowing price action between 0.5635 resistance and 0.5600 support indicates a volatility contraction. Such behavior is often followed by a breakout after the triangle formation is complete. Hence, CADCHF is getting closer to a decision zone where an expansion is expected after a compression. Moving averages are still slightly downward-pointing, which is a sign that there is still some bearish pressure left from the previous selloff. Nonetheless, price trading sideways instead of going down further is a sign that momentum is running out. Oscillators also depict flattening, which is consistent with the interpretation of consolidation rather than trend continuation. In a nutshell, CADCHF is experiencing a corrective consolidation after the strong bearish impulse and price respecting the Fibonacci structure. The first resistance level is 0.5635 (23.6%), the next is 0.5660 (38.2%), followed by 0.5680 (50%) and 0.5700 (61.8%). The major support is still 0.5600, which acts as the bottom of the wedge. A breakout of 0.5660 would be a sign of recovery, whereas a fall below 0.5600 would be after that extension of the broad bearish move.
