Trade Recommendation: CHF/JPY
The Swiss Franc/Japanese Yen (CHF/JPY) pair started running out of bullish steam in June 2015 when it generated a lower high of 134.61. The market’s condition was aggravated when it broke below critical support of 118.50 in January 2016. From that point, CHF/JPY plummeted as it created a series of lower highs and lower lows until it bottomed out at 101.742 in June 2016.
Even though the Swiss Franc lost almost a quarter of its value against the Japanese Yen, the currency rallied after finding the bottom. It went as high as 115.455 in December 2016 before correcting and creating a higher low of 107.675 in April 2017. With a higher low in place, the market attempted to breach resistance of 118.50 in July 2017 and February 2018. While bears managed to hold on, it seems that bulls are not backing down.
Technical analysis show that the Swiss Franc/Japanese Yen pair has created another bullish higher low setup at 110.410 in March 2018. With this price action, an ascending triangle pattern appears to be emerging on the weekly chart with the breakout point at 118.50. So far, the market appears to be respecting the trendline. We’ll use it to generate a profitable trade.
The strategy is to buy as close to 111 as possible. If bulls continue to follow the trendline, they will make another attempt on our target of 118.50. Sell immediately once the target is hit as it is unlikely that the bulls will complete the breakout on the next attempt. The process may take less than three months.
Weekly Chart of CHF/JPY on Forex.com
As of this writing, the Swiss Franc/Japanese Yen pair is trading at 111.414 on Forex.com.
Summary of Strategy
Buy: As close to 111 as possible.
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