CHFJPY failed to rally to the 118 resistance, registering a failed attempt at 117.61.
The pair is trading above the 38.2% Fibonacci handle of the 139.11-101.69 bearish leg. This keeps the pair biased to the upside in the belong-term.
In addition, the recent attempt saw prices break the median regression of the 58.70-100.86 ascending channel.
The multi-month high triggered a pullback and the pair entered a downplay. This is also signaled on the momentum indicator as it formed a bearish divergence.
The short-term outlook suggests another upside leg before spurring stronger short bets. This is indicated through a bullish momentum signal, as seen in the chart below.
Prices are trading below the median regression of the 108.65-114.48 leg. Thus, we will focus on the 115.99 support bounce, or break, first.
The depth of the downplay will depend on the firmness of the said support. A break will bring the 38.2% Fibonacci of the 108.65-117.61 leg back in play.
This could act as a confluence level between the median regression and the Fibonacci level. However, it could ruin the hidden divergence shown on the momentum indicator.
Therefore, we expect the decline to last shorter on divergence and channel-test expectations.
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