CADCHF 240 and 60 minutes – An Update

I wanted to have another look at this pair which I first presented here in early May. The methodology that we use seeks to identify the path of price at an early stage and then to delineate or define it by means of a pitchfork. It is not the pitchfork itself that is important but the angle ascent or descent that it follows. By matching price to this angle we can then monitor the strengthening or weakening of trend as it progresses.

cadchf-2-240-chart1

We last looked at this pair in the area of the puce circle in Chart 1. We had been following as price rose from the puce Sliding Parallel following the series of touches in the green circles and had noted the constant line of resistance as shown by the higher puce Sliding Parallel. The validation given by the price action along these lines was sufficient for us to continue to follow it. Note how price moved strongly higher from the last green circle running into resistance at the higher puce Sliding Parallel and then falling back to find support along the grey horizontal.

Although we spend the majority of our analysis looking at movements in the angle of our pitchfork we are not immune to what happens along the horizontal. Here the fact that resistance later became support was noticed and deemed to be bullish. From this support price moved higher again before running into resistance once more along the same puce Sliding Parallel. Note how we are following support stepping up in the angle of the fork – from the line of green circles, to the arrowed blue Sliding Parallel beneath the Median Line and now to a higher arrowed Sliding Parallel shown in green. It is normal to expect resistance to be put under pressure when we see support stepping up and members of the Cross Pair Analysis service have been aware of this and watching these moves unfold.

We are looking to see if there is enough upside pressure to push through the puce Sliding Parallel that has acted as resistance since early April. It is less the breach of this line itself that is important but more where we find support on any retracement. If, for example, price pushed above the line and came back to test it from above and found support along it that would be a bullish indicator and would have us looking to challenge the higher line of the Upper Parallel that had been resistance once before.

cadchf-2-60-chart2

One feature of the Cross Pair Analysis is that we look at vehicles across various timeframes. Chart 2 shows the same pair on a 60 minute basis and Chart 3 shows the same vehicle in more detail. Note how once more we use a distinct A, B and C to draw our pitchfork – this time it is a variant known as a Schiff or Unmodified Schiff. Here the origin of the fork is moved 50% in price from the A pivot to the B pivot.

Chat 3 shows the validation that we found on this fork – the series of red circles denoting the activity that we saw along the Median Line of the fork and which told us that we had correctly defined the path of price. Note how we use the same techniques to mark a strengthening of trend along the path of price. Resistance in mid-June along the quartile of the fork moved higher to the Sliding Parallel just under the Upper Parallel and support along the Median Line also moved up to the Sliding Parallel denoted by the up facing red arrows. (Note incidentally that when this puce Sliding Parallel support briefly breached that support was found along the Median Line once more…)

cadchf-2-60-chart3

In the last day or so the puce Sliding Parallel resistance has been breached to the upside and we have seen price come back and start to establish support along this same line. We potentially have a bullish higher channel forming with the puce Sliding Parallel as new support and a higher green Sliding Parallel as resistance. We will continue to monitor this chart and use the shorter timeframe as a “canary in the ine” for our longer timeframe 240 minute chart.

The Cross Pair Analysis service looks  to cover a dozen non-US Dollar pairs on a daily basis, looking at context via Weekly and Daily charts and in detail via 240, 60 and, sometimes, 20 minute ones.

I recently hosted a webinar looking at the Cross Pairs – it is available to watch here:
http://www.coghlancapital.com/node/8759

I will be hosting another free webinar on Wednesday 9th July – registration is available at this link:
http://www.coghlancapital.com/node/9207

If you would like to find out more about our analysis or services please follow this link:
https://www.coghlancapital.com/signup

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