Good morning Traders!
Following the end of April sharp decline of the Japanese Yen, CHFJPY has broken its previous Monthly swing Higher High, signalling potential buyers’ momentum.
CHFJPY: Overextended Market Pulls Back, Breaking Newly Found Downtrend
After breaking to this new Higher High, the market was very overextended and had been pulling back, releasing some of this strong buying momentum. As the market pulled back on the higher timeframes, the lower timeframes changed direction, and the Daily chart confirmed a downtrend. However, with yesterday’s move to the upside, the Daily chart’s newly found downtrend has been broken.
Turning our attention to the 4hr, we can spot that the area of around 152.30 has plenty of touches both on the way up and down. Yesterday action pinged this level. However, the price could not hold and close above it.
I am looking for further price compression underneath this resistance level, potentially on the lower timeframes. However, if the market breaks through this area without further compression, then I will be looking for a potential retracement setup if and when the market pulls back to test this level from above.
Happy Trading!
