Hi Traders! CHFJPY short term forecast update and follow up is here. On July 5th I shared this “CHFJPY Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, we could see that the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows we may consider this as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we were looking for is happening. In addition to this, we had a bearish hidden divergence that has formed between the first high that has formed at 142.314 and the second high that has formed at 141.577 based on the MACD indicator, followed by a potential bearish continuing divergence we may consider this as other evidences of bearish pressure. Also, we had two strong support zones and the price which was moving lower has broken below these zones and holding below them. We may consider this as yet another evidence of bearish pressure. Currently these two strong support zones are acting as two strong resistance zones for us. Until both these resistance zones hold my short term view remains bearish here and I expect the price to move lower further. A valid breakout below the most recent uptrend line would be the validation for this bearish view.
CHFJPY H1(1 Hour) Chart Current Scenario
In this pair my short term view was bearish and I was expecting the price to move lower further until the two strong resistance zones hold. Also, I mentioned that “A valid breakout below the most recent uptrend line would be the validation for this bearish view”. The price action followed my analysis exactly as I expected it to here. After the bearish trend pattern, the price which was moving higher reached the first strong resistance zone, respected it and then it bounced lower from this zone. Also the validation for the bearish view which is a valid breakout below the most recent uptrend line happened as per the plan. The price then retested the breakout and then it moved lower further and delivered 230+ pips move to the downside until it was blocked by a bullish divergence.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
So traders when it comes to trading, there are various important factors that we need to pay attention to, just because we have a good setup doesn’t mean that we can enter the trade randomly and it will pay us huge profits. First of all, we need to validate the entry and we should have a perfect entry plan to get into the trade which is a key factor when it comes to trading. This CHFJPY short term forecast is yet another good example of this scenario.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
