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 – Strong Resistance Zone, Bearish Divergence, Parabolic Sar
On the daily chart, the price which was moving higher reached a strong resistance zone, respected it, and is currently bouncing lower from this zone. We also have a bearish divergence that has formed between the first high that has formed on 10th December 2020 and the second high that has formed on 29th December 2021 based on the MACD indicator and RSI indicator which we may consider as evidence of bearish pressure. Also based on the Parabolic Sar we could see that the dots are above the price which we may consider as another evidence of bearish pressure. So everything looks good here for the bears, we may now move down to lower timeframe and see if we can find evidences supporting this bearish view.
CHFJPY H1(1 Hour) Chart Analysis – Bearish Trend Pattern, Strong Resistance Zone, ADX Indicator
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, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bearish pressure. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it. Currently, this strong support zone is acting as a strong resistance zone for us. Until this strong resistance zone holds my view remains bearish here and I expect the price to continue lower further.
Technical Analysis & Forecast Summary
CHFJPY D1(Daily) Chart Analysis
- Strong Resistance Zone, Bearish Divergence, Parabolic Sar
CHFJPY H1(1 Hour) Chart Analysis
- Bearish Trend Pattern, Strong Resistance Zone, ADX Indicator
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
