Check out this fresh ascending channel forming on the 4-hour time frame of CHF/JPY!
Is the pair gearing up for another pullback to the support zone?
Here are the correction levels worth keeping tabs on:
CHF/JPY 4-hour Forex Chart by TradingView
This yen pair has been forming higher lows and higher highs connected by an ascending trend channel that’s been holding since mid-September, as safe-haven flows appear to be favoring the lower-yielding franc.
Price is stalling at the channel top, which coincides with R3 (194.62) and could retreat back to nearby support levels marked by the Fibonacci retracement tool.
Are buyers ready to jump in soon?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Swiss franc and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
CHF/JPY could dip to the 38.2% Fib level, which is near R2 (192.23), or the 50% retracement closer to the 192.00 major psychological level and a broken resistance zone that could hold as support.
A larger correction could reach the 61.8% Fib around the channel bottom, the 191.50 minor psychological mark, and the 100 SMA dynamic inflection point.
Reversal candlesticks forming at any of these potential support levels could suggest that a bounce is in order, possibly taking the pair back up to the swing high or to the next upside target at R4 (196.01).
On the other hand, long bearish candlesticks slipping below the channel support could point to a likely trend reversal which could lead to a test of the bearish levels at S1 (189.17) then S2 (187.78).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
