Swiss Franc versus Japanese Yen has travelled precisely in accordance to our previous analysis which was published on 25th Oct, anticipating that the market will be rallying higher. We made this analysis based on the perspective of elliot wave pattern in the daily time frame which showed that market to be either in the fourth bearish corrective wave and an expected 5th bullish wave was to be awaited that might lead the market towards 126.36. Also on the weekly chart we were expecting an awaited final 5th bullish wave that might lead the market towards 128.45. From the current market structure in the weekly time frame, we can assume that CHFJPY is in an irregular correction with the current leg up being wave 'b' of the corrective structure. If the aforementioned scenario of irregular flat turns out to be true and the market fails to sustain itself above 122.80, then we can expect the the pair to fall sharply towards 119.40 near exponential moving average 50 in the daily time frame. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

To prove that CHFJPY has gained strong grounds for hawkish rally towards 126.36, the pair will have to struggle and stay above 123.45 and 122.80 accordingly. As we can see that the relative strength index in the daily and intraday time frames are entering the overbought conditions, the market will definitely call for a correction on the interday time frames and an expected bearish move can be made towards 123.45 and further 122.80. On the hawkish side, the pair will have to stay above previous 100% fib level on the daily time frame, a dive below would open doors for further losses that would lead the market  towards 122.13. 

Is CHFJPY ready for dovish correction ?

Nov 02 2021