CADCHF recently fell through the floor around the .6850-.6900 region, indicating that a selloff is underway. However, price is in the middle of a correction and might retest the former support zone.

The Fibonacci retracement tool shows that this lines up with the 50% Fib and dynamic resistance at the moving averages. In particular, the 38.2% level is at .6865, then the 50% level is at .6878. The line in the sand for a correction might be the 61.8% Fib at .6891.

The 100 SMA just crossed below the 200 SMA to suggest that the path of least resistance is to the downside or that resistance levels are more likely to hold than to break. The 200 SMA even lines up with the highest Fib to add to its strength as a ceiling.

If any of the Fibs are able to keep gains in check, CADCHF could resume the slide to the swing low at .6822 or lower.

Stochastic is already indicating overbought conditions and is starting to head south to reflect a return in selling pressure. The oscillator has plenty of room to move lower before reaching the oversold area.

RSI, on the other hand, is still heading higher to show that there is some upside pressure left. This could be enough to take CADCHF up to the nearby Fib levels before selling pressure picks up.

There are no major reports lined up from the Swiss economy this week, so CADCHF could take cues mostly from Canada’s catalysts.

The BOC decision is coming up, and many are expecting the central bank to hold rates steady after citing that they are planning on pausing their tightening efforts. More dovish remarks could bring more downside for the Canadian dollar later in the week.

Also, the Canadian jobs report is lined up, and analysts are expecting a slower pace of hiring for February.