Market NewsTechnical Analysis

CHF/JPY: Double Top Followed by Neckline Breakout, What is Next?

  • The pair produced a Double Top and looks bearish
  • The pair trades below Simple Moving Average 30
  • A big drop may occur next week on the H4 chart
  • The H1 chart looks bearish
CHF/JPY H4 Chart
CHF/JPY H4 Chart

CHF/JPY The Bear is on Its Way on the H4 Chart

The pair made a good bullish move on the H4 chart earlier. It had a rejection at 166.350 and made a bearish correction. The price headed towards the resistance again and made a strong bearish move upon having its second rejection. On its way, the pair made a bearish breakout at Simple Moving Average 30. The chart suggests that sellers are going to keep their eyes on the pair to go short from value areas. The H4 chart shows that the price has enough space to travel towards the South. This would be another reason for more sellers to go short in the pair and drive the price towards the downside with good momentum.

On the upside, the pair may not get bullish again until it makes a bullish breakout at 166.350.

CHF/JPY H1 Chart
CHF/JPY H1 Chart

The H1 Chart Gets Bearish after Long Consolidation

The H1 chart shows that the price consolidated around 166.350 for quite a while. The level has been a strong level of resistance on the H4 chart as well. Thus, traders seemed to be very indecisive about which direction to go with. It consolidated within a horizontal channel and then made a bearish breakout at the channel’s support. The price has been bearish since then. As of writing, it is in consolidation as well within 165.300-165.800. A bearish breakout below today’s lower low may drive the price towards the South further. The price may find its next support around 163.900.

On the contrary, if the price makes a bullish breakout it may extend its bullish correction up to 165.750.

The H4 chart favors the Bear. The sellers are going to look for the price to produce bearish momentum from the value area to go short. The H1 chart looks bearish as well. It may make a bullish correction though. Considering both charts, it seems that the pair is going to remain bearish for some days.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn

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