CHF/JPY Сould be Reversing to the Downside

CHF/JPY Сould be Reversing to the Downside

Published: March 5th, 2020

Daily chart

CHF/JPY Daily Technical Analysis 5 Mar 2020

On the daily chart, CHF/JPY failed to produce a new higher high, but at the same time, it went down, producing a new lower low. This could be the very first sign of a potential trend reversal. And in fact, this could be a substantial decline in the coming days or weeks. Obviously the first obstacle on the way down should be the 200 Days Exponential Moving Average, which is close to 111.00. But let’s see tree other timeframes to get a deeper understanding of the price action.

4-Hour chart

CHF/JPY 4-Hour Technical Analysis 5 Mar 2020

On the 4H chart, price formed a double top, after which the corrective move down as initiated obviously. What is interesting is a clean bounce off the 23.6% Fibonacci retracement level and on the next corrective wave up, a clean bounce off the 38.2% level. Eventually, the price broke below the 200 EMA, which does show a great selling power at this stage. And finally, we can see price is currently rejecting the 200 EMA, which can be the beginning of a stronger move down, much stronger then we saw up until now. However, 88.6% support level must watch for rejection along with the 200 EMA on the daily chart.

1-Hour chart

CHF/JPY 1-Hour Technical Analysis 5 Mar 2020

Here comes the 1H chart. And here, price rejected the downtrend trendline along with 200 EMA, same as on the 4H chart. Resistance is formed near 112.60, where price still can rise, but break above this area, together with the EMA, could mean “bullish” for CHF/JPY once gain. Nevertheless, at this stage, CHF/JPY still looks extremely bearish.

30-Minute chart

CHF/JPY 30-Minute Technical Analysis 5 Mar 2020

On the 30M chart, we can see an interesting price action, downtrends are being penetrated. And what is even more interesting is that the first trendline breakout occurred straight after the price goes above the 200 EMA. Seems like someone is kicking out the sellers prior to a heavy downside move. Perhaps this time we will see the same scenario, as price in fact had a break and close above EMA, but soon after went right below again. As we can see, today CHF/JPY rejected 200 EMA cleanly, which is a good bearish sign. This could lead to another impulsive wave down, where the nearest target is seen at 88.6% Fibonacci, that is 111.30 level.

15-Minute chart

CHF/JPY 15-Minute Technical Analysis 5 Mar 2020

The last chart is 15M and here we can see yet another downtrend trendline breakout. For now, the price stays within the descending channel. A short term consolidation can be expected, although on the chart it is clear that it has been ranging an extended period of time. Therefore it is reasonable to expect some sort of movement very soon.

Summary

CHF/JPY failed to produce a new higher high on a Daily chart and started to break multiple trendlines on multiple timeframes along with the EMA. This currently shows that bears are in control and the rest of the bulls could be kicked out of the market shortly.

Downside targets

First target to watch is at 111.30 level, which is 88.6% Fibonacci retracement level as per the Daily chart above. If it gets broken, the price is likely to test either 110.90 or 110.40. Break below both of these levels could mean a long term downtrend for CHF/JPY.

Probability of an uptrend

While it seems unlikely for the CHF/JPY to produce any sort of strong growth at this point, the most recent high at 112.78 could give a lot of clues. If price breaks and closes above on 1h and 4h charts, this would invalidate bearish scenario and pair likely to go into a consolidation phase. At the same time, if the breakout above will be impulsive, this could mean a continuation of a long term uptrend.

Support: 111.30, 110.90, 110.40

Resistance: 112.64 112.80, 113.05

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