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CHFJPY has seen a previous test at the 118 area fail. Currently, the pair has maintained a bullish bias for the last four months.
However, the bearish divergence on the momentum indicator hints to a move to the downside. A fall past the Tenkan line has shifted the focus towards the 23.6% line of the 108.60/117.91 Fibonacci retracement leg.
Should the Kijun line be unable to keep hold of prices, then the next target could then be 38.2%. This level would be in confluence with the high of the previous rally at the beginning of 2020.
We now await clues on the momentum indicator for any signs of a potential continuation to the upside. This would break the 118 mark and then head towards 118.60 which is the March 2019 high.
The short-term focus indicates that prices are trading in an ascending channel. The lower regression line is almost being tested again as we now wait for a bounce at the said level or a break downwards.
The double divergence on the momentum indicator hints to a move towar...
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