In this analysis, we’ll look at two safe-haven currencies, the CHF and JPY. For the past four weeks, the pair is in a sideways trend, locked inside of a rectangle pattern, which tells us, that a breakout and – as a result – a major trading signal is close. the rate was highly likely going to look for support in the 123.50 level, which kept the rate up during late October. A passing of the support of the 123.50 mark could result in a decline to the 121.94/122.35 and the 200-hour simple moving average near 122.30.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

In which direction? Well, we are about to find out. In October, the price created a very handsome Head and Shoulders pattern (yellow), which in November resulted in a breakout of the neckline (green) and a further drop. What is amazing on this instrument is how the price respects the Fibonacci retracements. You can see, that the decline retraced the 38,2% Fibonacci of the uptrend that started in the middle of September. And that is actually the lower line of the current rectangle (grey). The upper line is the neckline mentioned before and it’s in the same the 23,6% Fibonacci. 

How can traders approach this? It’s pretty simple, a breakout to the upside, so the price closing the day above the 23,5% Fibonacci will be a great buy signal. On the other hand, the price closing the day below the 38,2% Fibonacci will be an amazing signal to go short. As for now, traders have to be patient and wait. Great movements with high momentum are coming.

CHFJPY Expected to Continue Bearish Trend

Dec 11 2021

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