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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
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CHFJPY Could Be Set For Another Break Lower

Article By: ,  Financial Analyst
July 17, 2019 11:35 PM

CHF/JPY Could Be Set For Another Break Lower

Since its bull-trap at the start of the month, a lower high appears to have formed and the cross is now testing a potential breakout level.

Two weeks ago, we noted that CHF/JPY’s bull-trap and subsequent crash through key support had slammed it back onto our bearish watchlist. Sometimes it can take a little longer than you’d like to migrate from the watchlist to a trade (and sometimes it simply never happens), but it now appears CHF/JPY is preparing for its next dip lower.

Over the past week, five doji’s have formed below 110 (one being a bearish pinbar) and yesterday was its most bearish day in two weeks. The 100-day average has capped the recent swing high and, whilst the 50-day is acting as support, a clear break of 109.21 support invalidates it and takes it back within its original range.

As a quick re-cap to the prior analysis, CHF/JPY has been trending lower in a choppy fashion since the 118.067 high. We suspect we’re nearing the end of anything choppy, sideways correction.

  • Near-term bias is for a break below 109.21, bringing the 108.22 low into focus.
  • Should the bearish trend, it should also break beneath the 2017 low.
  • A break back above 110 / 100-day MA invalidates the near-term, bearish bias.

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