CHF/JPY 4H Chart: Channel Up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
In the lower time-frames (H1) going long in CHF/JPY might seem to be a good idea, but the H4 chart suggests a decline is more likely. The pair has just encountered an upper boundary of an emerging channel, which is also reinforced by the monthly R1 level. Accordingly, we expect a sell-off from here, especially considering the weekly technical studies. The immediate support is at 124.54, but a serious test of the bearish momentum will be at 123.70, where the monthly PP merges with the weekly S1 and 200-period SMA. Correction should start near the lower edge of the pattern, namely circa 122.70. At the same time, SWFX sentiment is negative: 74% of positions are shorts.
© Dukascopy Bank SA
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