This yen pair has been stuck in a holding pattern for quite some time, but it looks like it’s finally ready to break out.
Which direction will it go?
Take a look at these nearby inflection points and potential targets on the 4-hour time frame:
CHF/JPY 4-hour Forex Chart by TradingView
CHF/JPY has been forming higher lows since April but has also been struggling to push past the resistance around the 176.00 handle, creating an ascending triangle formation.
Price is now testing this pattern’s resistance, possibly gearing up for a break higher and a rally that’s the same height as the chart formation.
Can it sustain bullish momentum until the next upside targets?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Swiss franc and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
These lower-yielding currencies appear to be locked in a safe-haven battle lately, although franc bulls appear to be putting up a stronger fight while yen traders are digesting less hawkish BOJ commentary.
Increased upside pressure for CHF/JPY could take the pair up to R1 (176.95) then R2 (177.72) or even R3 (179.13) so keep your eyes peeled for long green candlesticks closing above the triangle top.
On the other hand, a return in yen strength could still drag the pair back down to nearby support levels at S1 (174.76) near the 175.00 handle and the triangle support.
Don’t forget that the Swiss currency is facing a possibly dovish SNB also, as latest inflation data from the economy came in the red.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
