Is CHF/JPY in for more downside moves? Well, a rising wedge pattern appears to be forming, so there’s a higher-than-average chance that the pair may move lower sooner or later. And if a downside breakout does occur, then the resulting selloff may have enough momentum for a 130-pip move, based on the height of the pattern. However, do note that the moving averages are currently in uptrend mode while stochastic is signalling oversold conditions. It would therefore be prudent to prepare for the possibility that the pair may move higher while still respecting the pattern.
AUD/CHF’s fall was temporarily halted when the pair got violently rejected at the 0.7350 minor psychological level (dashed horizontal line). However, the bears were relentless and they were able to smash past that support area. The bears ran out of steam when they encountered fresh buyers at the 0.7280 handle, though. And so the pair pulled back to the broken support area at 0.7350. Incidentally, the pair failed to move past the 0.7350 level, so the said level now seems to be acting as resistance. And if we apply our Fibonacci tool, we can see that it lines up rather nicely with the 50% retracement level. Additional technical arguments for a downside move include stochastic signalling overbought condition, as well as the possibility that the 100 SMA may act as dynamic resistance.
Finally, NZD/JPY has been consolidating ever tighter into what looks to be a symmetrical triangle pattern. The said pattern may break out in either direction, so it would be probably be prudent not to have a strong directional bias on the pair. In any case, a breakout move in either direction could potentially last for about 100 pips, based on the height of the triangle pattern. And as usual, just 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.