The Canadian dollar has rallied a little bit against the Swiss franc during Monday’s trading session as we reach toward the 0.5875 level.
That is an area that previously has been both support and resistance, and the fact that we gave back some of the gains does suggest that maybe it is going to be more of a grind higher than a straight shot.
Keep in mind that the Canadian dollar is highly levered to the oil market, but at the same time, we also have a major interest rate differential between Canada and Switzerland, with the Swiss National Bank doing everything it can to keep interest rates closer to 0%. Furthermore, the oil market continues to see an upward trajectory, and that helps the Canadian dollar. Later in the session, American officials did state that perhaps the talks with the Iranians are going better, and that could give you a potential setup for the oil markets to cool off, which might work against the Canadian dollar.
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Nonetheless, though, you get paid to hang on to this pair daily
Therefore, it does make quite a bit of sense that we would continue to see short-term buyers coming into the CAD/CHF pair on some type of bounce. The 0.58 level looks to be a major floor, but we also have the 50-day EMA at the 0.5827 level.
That being said, this is a market that continues to aim for the 0.59 level, but it may take some time to get there. Keep an eye on oil. The higher it goes, the more likely it is that this pair goes higher.
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