Hi Traders! Today I share with you my CHFJPY technical analysis and forecast post. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis now from the daily chart.
CHFJPY D1(Daily) Chart Analysis – Bearish Divergence, Stochastic Oscillator, Downtrend Line
On the daily chart, we had a bullish rally that has completed itself. This bullish rally ended with a bearish divergence that has formed between the first high that has formed on 5th June 2020 and the second high that has formed on 14th August 2020 based on the histogram of the MACD indicator, which we may consider as evidence of bearish pressure. Currently, it looks like a pullback is happening, and based on the Stochastic Oscillator we could see that the price has reached its extreme. Also, we have a good downtrend line that has formed and the price is holding below this dynamic resistance. We may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
CHFJPY H4(4 Hours) Chart Analysis – Bearish Trend Pattern, Key Resistance Zone, Bearish Divergence, Volumes Indicator
On the H4 chart, the price which was moving lower has created a bearish trend pattern in the form of three lower highs, lower lows. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like the correction that we are looking for is happening. The price which is moving higher has reached a key resistance zone formed by the 50%(115.564) – 61.8%(116.106) fibonacci retracement zones of the bearish trend pattern. We also have the daily downtrend line and the 200 moving averages coinciding in the same area. In addition to this we have a bearish divergence that has formed between the first high that has formed on 29th September 2020 and the second high that has formed on 7th October 2020 based on the MACD indicator. Also, the volumes are dropping based on the Volumes indicator, and based on the 200 moving averages the slope is bearish, we may consider these as evidences of bearish pressure. So until the key resistance zone shown in the screenshot below (marked in blue) holds my view remains bearish here and I expect the price to continue lower further.
Technical Analysis & Forecast Summary
CHFJPY D1(Daily) Chart Analysis –
- Bearish Divergence, Stochastic Oscillator, Downtrend Line
CHFJPY H4(4 Hours) Chart Analysis
- Bearish Trend Pattern, Key Resistance Zone, Bearish Divergence, Volumes Indicator
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