By: John Ursus
Recommendation: Short Position
Entry Zone: 114.00 – 115.00
Take Profit Zone: 99.50 – 101.50
Stop Loss Zone: 119.00 – 120.00
The CHFJPY has rallied sharply over the past two years. The rally took this currency pair from an intra-day low of 78.34 to an intra-day high of 119.16. The massive rally came on the back of weakness in the Japanese Yen thanks to a massive economic stimulus plan announced by Prime Minister Abe as the Bank of Japan was on a Japanese Yen destruction course fueled by hopes for a boost to exports and stimulation of the economy.
After this currency pair reached its intra-day high of 119.16 forex traders decided to take profits which left this currency pair in a sideways trade. Over the past six trading months the CHFJPY has saw an increase in bearish pressures which have pushed this currency pair towards the lower band of its resistance level. Should the CHFJPY breakdown below the 113.00 level a larger correction could take place.