Hi Traders! CHFJPY forecast update and follow up is here. On July 13th I shared this “Technical Analysis – CHFJPY Forecast” 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 H4 chart after the strong bearish move, the price is currently moving inside a range. This range is formed by the highs and lows reaching parallel support and resistance zones. The price which is moving inside this range has currently reached the top of it. Also, while measuring the first wave using the Fibonacci expansion tool we could see that the 100%(121.142) Fibonacci expansion level of the first wave coincides with the top of this range which makes this area a key resistance zone for us. The price which was moving higher reached this key resistance zone, respected it and is currently bouncing lower from this zone. Also, based on the Stochastic Oscillator we could see that the price has reached its extreme and is bouncing lower which we may consider as evidence of bearish pressure. In addition to this, based on the Parabolic Sar we could see that the dot is above the price which we may consider as yet another evidence of bearish pressure. Until this key resistance zone holds my short term view remains bearish here and I expect the price to move lower further.
In this pair based on the multi-timeframe analysis my view was bearish and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the key resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered around 180 pips move until it was blocked a bullish divergence.
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Yordan Kuzmanov
Chief Trader at the Traders Academy Club
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