CHF/JPY Could Be Set For Another Break Lower
Matt Simpson July 18, 2019 3:35 AM
Since its bull-trap at the start of the month, a lower high appears ot have formed and the cross is now testing a potential breakout level.
Since its bull-trap at the start of the month, a lower high appears to have formed and the cross is now testing a potential breakout level.
Two weeks ago, we noted that CHF/JPY’s bull-trap and subsequent crash through key support had slammed it back onto our bearish watchlist. Sometimes it can take a little longer than you’d like to migrate from the watchlist to a trade (and sometimes it simply never happens), but it now appears CHF/JPY is preparing for its next dip lower.
Over the past week, five doji’s have formed below 110 (one being a bearish pinbar) and yesterday was its most bearish day in two weeks. The 100-day average has capped the recent swing high and, whilst the 50-day is acting as support, a clear break of 109.21 support invalidates it and takes it back within its original range.
As a quick re-cap to the prior analysis, CHF/JPY has been trending lower in a choppy fashion since the 118.067 high. We suspect we’re nearing the end of anything choppy, sideways correction.
- Near-term bias is for a break below 109.21, bringing the 108.22 low into focus.
- Should the bearish trend, it should also break beneath the 2017 low.
- A break back above 110 / 100-day MA invalidates the near-term, bearish bias.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.