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I mentioned on Wednesday that CADCHF looked as though it might be turning the corner. The pair had been in an uptrend since March where it gained approximately 820 pips. On Wednesday the pair gave up considerable ground, closing below the .8406 key level.
The market retested this level as resistance on Friday, forming a bearish pin bar in the process. Given the break of support and subsequent bearish price action I do like this market lower. If the bears can hold it below .8406 we may see a move down to the .8240 key support level.
One caveat is that the market is still a good distance from the 10 and 20 EMAs. Most markets tend to revert back to these moving averages after making an extended move such as we saw between October 13th and October 15th. As such we may get another retest of .8406 before the market decides to make a move lower.
Summary: Opportunity to trade a 50% retrace of Friday’s bearish pin bar. Key support comes in at the August low of .8240.
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