CAD/CHF quotes are distinguished by their stability, because over the past 18 months we have seen a constant downward trend, which means that long-term investments in this currency pair are the most effective. However, lately we have seen the Canadian dollar strengthen against the franc despite the very low oil prices. This was made possible thanks to the aggressive monetary policy of the Bank of Canada, but whether there will be enough incentives for the CAD in the future for further recovery is a big question, given negative external and internal factors.
Despite the increase in the rate in Canada to 4.75%, the regulator is unlikely to decide on a rate of more than 5%, since this could cause extremely negative consequences for the economy. Given the problems of the US in the banking sector at high rates, the Bank of Canada is unlikely to take risks. Even the rise to 4.75% was shocking for investors.
Against the background of the recession in the EU, officially fixed last month, the franc has good chances as a safe asset, and the Swiss National Bank regulator seems to have come to terms with a strong franc and sees no other way but to raise the rate.
At the end of April, the rates reached an absolute minimum, which, in theory, could be a sign of a trend reversal. Indeed, the recovery of CAD has begun, but we still believe that there will not be enough incentives for growth. We can see on the chart so far only a price correction, which is close to completion. As for technical analysis tools, they indicate the effectiveness of short trades, which coincides with our plans to open the deals to SELL today, in anticipation of a new testing of the lows reached earlier.
