Don’t look now, but CHF/JPY is sitting right on a major area of interest on its daily time frame.
As you can see on the long-term chart below, the pair is testing a Fib level, ascending trend line, and former resistance zone.
Better keep your eyes on these levels in case the uptrend stays intact!
Franc bulls (or yen bears) seem to be defending the solid support zone, as a long-wicked candlestick formed as soon as price tested the area of interest.
After all, this is right around the 61.8% retracement level at the 169.00 major psychological mark, as well as S1 (167.35) at the rising trend line that’s been holding since September last year.
Can CHF/JPY head back north from here?
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 Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. Just be careful since CHF/JPY has dipped below both moving averages, so these could hold as dynamic resistance levels moving forward.
Sustained upside momentum past these near-term barriers and the pivot point level (173.70) could lift the pair all the way up to the swing high near R1 (177.16) and beyond, so keep an eye out for long green candlesticks that could attract more buyers.
On the flip side, stay on your toes for a continuation of the drop below the trend line, as this could clear the way for a move to the next downside targets at S2 (163.95) then S3 (157.58) depending on the next set of market catalysts.