News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bullish
USD/JPY
Bearish
More View more
Real Time News
  • #Oil prices saw a reprieve to the recent selling pressure but remain at risk while below downtrend resistance. Here are the levels that matter on the #WTI technical chart. Get your #commodities update from @MBForex here: https://t.co/CcXsF3JCMH https://t.co/RUmS1cX52v
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/5uSWKoLkd6 https://t.co/boEI8RuQdC
  • The growth-linked New Zealand Dollar may rise on the upcoming #RBNZ rate decision following rosy economic data. However, downside potential in the S&P 500 could offset $NZDUSD gains. Get your #currencies update from @ddubrovskyFX here: https://t.co/LfCe6C6G3P https://t.co/kUeBxxeaEf
  • It was a quiet week in Aussie as $AUDUSD put in its second consecutive week of indecision. But taking a more granular look highlights the potential for a reversal scenario. Get your #currencies update from @JStanleyFX here: https://t.co/PPK20nubAf https://t.co/0nfmRRFNnz
  • The S&P 500 pushed the market's comfort with a head-and-shoulders pattern through Friday's close. What should we look for in technical patterns, overlapping fundamental tides and speculative positioning for the likes of $EURUSD next week? https://www.dailyfx.com/forex/video/daily_news_report/2020/09/19/EURUSD-Pressure-Building-while-Anxious-Traders-Weigh-Did-SP-500-Break.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/lgVJVwi8th
  • Sterling remains trapped by overarching fundamentals drivers and both $GBPUSD and $EURGBP are going to have to wait until the Brexit dust settles. Get your #currencies update from @nickcawley1 here: https://t.co/vF1K1cy0nd https://t.co/NSA7qiQihc
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:https://t.co/1oygcFMFNs https://t.co/d9EmTOHyTv
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true.Simplify your trading strategy with these four indicators here:https://t.co/A4dqGMPylo https://t.co/xqbUxwWgTZ
  • An economic calendar is a resource that allows traders to learn about important economic information scheduled to be released. Stay up to date on the most important global economic data here: https://t.co/JdvW6HNuqV https://t.co/Gi8LHCT5sB
  • The AB=CD pattern is simple once you know how to spot it and draw the proper Fibonacci retracements. Make your trading strategy as simple as ABCD here: https://t.co/AKmlmaAZBS https://t.co/FFmRYyx4ou
CHF/JPY Cornered Between The 61.8% And The 50% Fibonacci Retracement

CHF/JPY Cornered Between The 61.8% And The 50% Fibonacci Retracement

2016-09-14 16:20:00
Quasar Elizundia, Currency Analyst
Share:

Searching For Concise Recommendations That Can Improve Your Trading Skills? Then Our Traits Of Successful Traders Guide Is An Excellent Material For You! Obtain Them HERE

Talking Points:

  • After Brexit, CHF/JPY failed to pose a new low
  • CHF/JPY getting closer to resistance inside channel line
  • Price action confined over the last three months between Fibonacci retracements

Introduction:

Over the last three months, CHF/JPY has failed to achieve any significant movement. The cross has accounted for an average rate of change of 0.19%. In comparison with the monthly trading activity of the two years before these three stagnated months, CHF/JPY registered an average monthly rate of change of 2.27%.

This trading environment could be taken as a signal that we are trading in a zone in which traders are indecisive for where CHF/JPY is heading.

Let’s move on to the charts so that we can get a better technical picture of CHF/JPY.

Long-Term Technical Outlook:

As we can observe in the chart portrayed below, since June of 2015 CHF/JPY started trading in a strong downward trend. During this period, trading action has mainly taken place within the boundaries of the symmetrical downward price channel with the exception of the aftermath of the Brexit referendum.

After the U.K.’s referendum to leave the European Union, CHF/JPY registered its lowest level, a level from which the CHF/JPY has failed to register a lower low; bringing now into consideration a bullish tone for the cross.

As of Wednesday’s New York session, the cross is hovering above the support trend line drawn from the 2016 low. Therefore, a further advance should be expected for the cross targeting the inside trend line of above-mentioned symmetrical channel. As a possible second target, the channel resistance line should be considered.

To invalidate this channel and set CHF/JPY for a stronger bullish bias, a higher high should be registered overturning the series of lower highs depicted with horizontal lines on the chart.

Now, let’s move to a bigger picture to know where the bigger trend favors CHF/JPY.

CHF/JPY D1 Chart:

CHF/JPY Cornered Between The 61.8% And The 50% Fibonacci Retracement

Chart prepared by Quasar Elizundia

Bigger Picture:

CHF/JPY M1 Chart:

CHF/JPY Cornered Between The 61.8% And The 50% Fibonacci Retracement

Chart prepared by Quasar Elizundia

As we can observe from our monthly chart above, the last three trading months have taken the form of Dojis. The Doji is a candlestick pattern known for showing market uncertainty or market indecisiveness of traders on which direction the market should heading.

It is no wonder that these candlesticks formed at this level as we can observe, this price zone is surrounded by key important technical levels.

First, we have the 61.8% and the 50% Fibonacci retracements from the 2012 low and the 2015 high. On the other hand, we have the support trend line drawn from the Low of 2012 and the resistance line drawn from the 2013 high.

In other words, CHF/JPY has been cornered by the above-mentioned technical levels. Usually, when markets are stuck in a price zone and finally a breakout takes place, this movement tends to be remarkably strong.

Given that the downtrend comes as a retracement of a bigger upside movement, my expectations are that this break takes place to the upside.

Bottom Line:

Given that on our daily chart CHF/JPY failed to continue the series of lower lows and our monthly chart shows that CHF/JPY stopped nicely on the 61.8% Fibonacci retracement in which has been an overall positive trend for the cross, the bias for the cross is bullish.

Nonetheless, in case that the cross starts registering lower lows and success to break below the 61.8 Fibonacci retracement, traders should address this currency cross with a bearish perspective.

Are you interested in knowing the Top Trading Opportunities of 2016? Click HERE

Are you a scalper? Then GSI is a tool that could help you on your short-term trades! Check it out HERE

Written by Quasar Elizundia

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES