CHF/JPY’s most recent correction could be extremely attractive for sellers

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Updated: 15 June 2020

Hello traders! Today we will observe the CHF/JPY currency pair, which slowly but steadily is starting to move down. It seems that we are witnessing the beginning of a stronger downside wave which might bring the price 300 pips lower.

On the 1-hour chart, we can see that both 50 and 200-period Exponential Moving Averages were both broken, while massive resistance has been formed near 113.60 area. After multiple bounces off the 113.60, prie went down sharply and confirmed the breakout of the 200 EMA.

The sellers could have been hunting something like the current correction to the upside as it offers an attractive selling price in the short and medium-term. As long as the 113.60 resistance area is being respected, the price should move lower, potentially to test 110.43 downside target.

The target is confirmed by two Fibonacci retracement levels, first being the 727.2% and second 361.8%. Both of the Fibs were applied to the corrective waves up, after breaking the 50 and then 200 EMA. In regards to the upside potential, at this stage is seems to hold little probability. Nevertheless, daily break and close above the 113.75 will invalidate bearish outlook and might result in the continuation of the uptrend.

Bias: Strongly bearish while below 113.75

Potential Resistance Zone: 113.00 – 113.25

Potential Targets: 110.43

Have a profitable trading!