CHF/JPY 1H Chart: Falling Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
As CHF/JPY has failed to cross the 200-hour SMA earlier this week, the Swiss Franc started to slide. However, at the same time the trading range was narrowing, which in turn has led to emergence of a potential falling wedge. Right now the pattern implies support provided by 114.84 and resistance provided by 115.30, which is currently reinforced by the weekly S1 and daily PP. But we must be aware that the latter level is in a greater danger than the former, considering the nature of the formation, as it usually portends a reversal. On the other hand, the rally, if it takes place, is likely to be short-lived, since at 116.05 there is a strong supply area represented by the weekly PP and 200-hour SMA.
© Dukascopy Bank SA
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