This chart is built upon last Friday’s CHF/JPY Fibonacci setup on the 1-hour intraday forex chart. Before we begin, congratulations to those who caught that 160-pip move to the downside. The other intraday chart art entries did well too, so congratulations to those who found a trade based on those other entries. Feels sweet, huh? And with that out of the way, I thereby present the updated 1-hour chart for CHF/JPY.
As you can see, price is currently testing the 131.50 minor psychological level. I see two potential scenarios here: (1) price continues downward or (2) price finds support and reverses. I personally favor the latter because the current price level has seen significant market interest in the recent past, so there is a very high probability that a reaction will occur. And should price find support here, we can expect forex traders bullish on the pair to try and test the 132.70 handle. After all, it too has seen significant market interest in the past.
Looks like USD/JPY is consolidating into a trading range or rectangle area pattern. And since the moving averages indicate that the trend is still down, our directional bias is also to the downside. The only disconcerting thing is that price began consolidating after going up from a previous low. To me, this indicates that forex traders bullish on the pair may be gathering strength for a major push to the upside, so make sure to prepare for that scenario as well.
One look at the chart, and it’s as clear as day that forex traders bearish on the pair have been slowly but surely eroding the bulls’ defenses. Still, the bulls are really holding on to the 138.50 major psychological level, which has seen significant market interest in the past. It’s only a matter of time before one side gives way. I personally favor a move to the downside because the bears appear to be relentless. Also, price has been closing below the 100 SMA and 200 SMA, showing that bears are winning the battle for now. Well, whatever your own directional bias may be, make sure to practice proper risk management should you find a trade based on this chart.
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To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.
Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.