CHF/JPY 4H Chart: Double Top

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Although since mid-March CHF/JPY has been in a strong up-trend, there are plenty of reasons to doubt further strengthening of the Swiss Franc. The main argument in favour of a reversal is formation of a double top. In order to confirm a change in the direction of the pair, the price should close below the neck-line at 131.50 (Jun 15 low and 200-period SMA). The target will then be the May 19 low at 128.19. However, if support at 131.50 withstands the selling pressure, the pair will likely surge back to 134.50, namely to the Jun 17 high. In the meantime, SWFX market participants are inclined to be bearish, and 58% of presently open positions are short.
© Dukascopy Bank SA
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