CHFJPY lost significant ground after the spectacular rally towards the pair’s highest since February of 118.05, falling as low as 111.54. Even though it attempted to recoup losses early this month, the pair somewhat reentered bearish mode this week, with the RSI flagging further weakness ahead; the indicator is currently heading south in bearish territory below 50 -notice though that it does not maintain a steep negative slope.
A leg lower could meet support from the area around 112.14, where the 200-day simple moving average (SMA) and the 61.8% Fibonacci retracement of the upleg from 108.49 to 118.05 roughly coincide. Under that obstacle, support could take place around the 78.6% fibo of 110.54, though prior to that it would be interesting to see whether the bears can violate the 111.54 low registered on October 26.
On the flipside, a reversal to the upside may find immediate resistance between the 50% Fibonacci of 113.27 and September 11’s trough of 113.85, a conjunction area in the past. If the price manages to decisively pierce through this zone, the door could open for the 38.2% Fibonacci of 114.40, while slightly higher the 115.00 psychological mark could be the next target.
In terms of the medium-term picture, the market returned to neutrality following the pullback from 118.05. It seems however that the trend is more likely to stay on the downside as the 50-day simple moving average (SMA) has already begun to slope downwards.
To sum up, the risk in the short term and the medium term is tilted to the downside.
Signal2forex.com - Best Forex robots and signals
