CHFJPY has been trading in an almost sideways market for the majority of the second half of 2020. The recent attempt to move higher out of the horizontal channel has been met with resistance.
Prices now look towards the mean once again, which is currently a confluence of the lower border of the Ichimoku cloud. Should the trend dive towards the lower 116 region, cloud engulfment will occur, which could lead prices towards recent lows.
The recent bearish divergence noted on the momentum indicator could move prices back to the 114 level.
A short-term perspective shows that after another attempt to the upside, prices have started to wane once again.
After confirming hidden and standard divergences, this could lead the way for a shift in the trend. The first target on the downside is the top border of the Ichimoku cloud, which is a confluence of the baseline indicator.
Should the said level be broken, then recent levels at the low 116 area could come into fruition. However, a bounce at the specific region could bring another attempt to the mid-117 mark.Test your strategy on how the CHF will fare with Orbex - Open Your Account Now.