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. See our updated Privacy Policy here.

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
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Wall Street
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
Gold
Bearish
GBP/USD
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
USD/JPY
Mixed
More View more
Real Time News
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 90.36%, while traders in France 40 are at opposite extremes with 70.16%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HYs8jzZrmf
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.19% 🇦🇺AUD: 0.11% 🇨🇦CAD: 0.09% 🇨🇭CHF: 0.05% 🇯🇵JPY: 0.03% 🇬🇧GBP: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Jntw19iZKD
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: Wall Street: 0.41% France 40: 0.22% Germany 30: 0.21% US 500: 0.15% FTSE 100: 0.13% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/uA7dhYQvQx
  • Chinese stocks rallied following PBOC's liquidity injection: - CSI 300 (+1.49%) - Hang Seng Index (+1.16%) - Hang Seng Tech Index (+2.23%) https://t.co/7j4DJu6YZD
  • There are three major forex trading sessions which comprise the 24-hour market: the London session, the US session and the Asian session. Learn about the characteristics of each session here: https://t.co/reRmDe1Ksp https://t.co/hwp2EU0zEm
  • "Wall Street Futures Update: Dow Jones (+0.39%) S&P 500 (+0.12%) Nasdaq 100 (+0.04%) [delayed] -BBG"
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.61% Gold: 0.23% Oil - US Crude: 0.09% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/UQpIKV2jEZ
  • Natural gas prices have recaptured a key trendline after a major heatwave sent energy demand in the United States soaring. Get your market update from @FxWestwater here:https://t.co/7DdcMrObKp https://t.co/G3OuF7Y5IB
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.17% 🇦🇺AUD: 0.11% 🇪🇺EUR: 0.10% 🇬🇧GBP: 0.06% 🇨🇦CAD: 0.04% 🇯🇵JPY: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/lqLaaO04eh
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 90.38%, while traders in France 40 are at opposite extremes with 70.61%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/KYpAOemcJX
CHF/JPY Cornered Between The 61.8% And The 50% Fibonacci Retracement

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

Quasar Elizundia, Currency Analyst

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