Hello traders! Today we’ll focus on the JPY pairs because it looks like the Japanese Yen is starting to become a currency of a safe haven once again. In this analysis, we will observe the CHF/JPY currency pair and its price potential in the coming week.
On June 5, the price has reached 114.60 high and since then CHF/JPY has been slowly but steadily moving down. Clearly, lower lows and lower highs are being produced and pair is moving within the descending channel.
While the price is declining the Fibonacci resistance levels are being rejected one by one. There is a cluster of Fibonacci levels that were rejected very consistently. The final bounce occurred on June 24, when pair cleanly rejected the 23.6% retracement at 113.00, which is also a very strong psychological resistance.
Price produced a spike slightly above, reaching 113.13 high, but the price failed to close above the 113.00 on the 4h chart. Currently, CHF/JPY is trading just below the 113.00 – 113.27 resistance area, which could be the starting point of the yet another wave to the downside.
Based on the Fibonacci retracement levels, applied to the corrective wave up after breaking the uptrend trendline, there are 3 potential downside targets. 161.8% at 112.00, 261.8% at 111.21 and 361.8% at 110.43. Price could be heading towards one of these support levels already next week.
Bias: Strongly bearish while below 113.13
Potential Resistance Zone: 113.00 – 113.13
Potential Targets: 112.00, 111.21, 110.43
Have a profitable trading!