CHF/JPY is currently rising after respecting that there descending channel’s support area and seems to be gunning for the channel’s resistance area. And assuming that price reaches the channel’s resistance area, chances are very good that said resistance will hold and the pair may go back down again since it lines up very nicely with the broken support area at the 111.00 major psychological level. Also, if price does somehow get there, the 100 SMA may potentially act as dynamic resistance. There’s a chance that price may go back down again without testing the channel’s resistance area, though, since stochastic is already indicating overbought condition.
As y’all can see, price has been trying to smash past support at 73.30, but that price level held since it seems well-defended by the buyers. In fact, buyers attempted a counterattack, resulting in that there rising trend line (dashed line). However, resistance at the 74.60 handle seems very strong and the bullish counter offensive failed on multiple occasions, giving us a 130-pip trading range or rectangle pattern in the process. Presently, price is rebounding after testing support at 73.30, so get ready if you’re planning to trade the range by shorting at the rectangle resistance area.
An ascending channel has formed on GBP/JPY’s 1-hour chart, but more conservative forex traders may wanna sit this one out for now because price is already well on its way past the mid-channel area for a potential test of the channel’s resistance area. For the more aggressive forex traders out there, just know that stochastic is already signalling overbought conditions, which may attract enough sellers to halt the pair’s bullish momentum soon. There are no guarantees that enough sellers will start coming in to send the pair lower, though, so make sure to practice proper risk management should you find a trade based on this or any of the other charts, alright?
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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.