Hi Traders! CHFJPY short term forecast update and follow up is here. On August 10th I shared this “Technical Analysis – CHFJPY Short Term 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 H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. We may consider this as an evidence supporting the bears. In addition to this, the price has created a bearish hidden divergence between the first high that has formed at 120.471 and the second high that has formed at 120.031 based on the MACD indicator, which we may consider as evidence 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.
On the H1 chart, my view was bearish and I was expecting the price to move lower further until the strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. The price which was moving higher reached the first strong resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered a nice move to the downside until it was blocked by a bullish divergence.
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