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Forex: Ideas You Can Trade - CHFJPY Downtrend Fails to Find Support

Posted by Steven Hatzakis on Jul 21, 2014 3:24:00 AM

CHFJPY: Bearish Channel Pushing Prices Lower With Support on 113.00 Faltering

The medium term daily candle chart below show the price history of the Swiss Franc (CHF) versus the Japanese Yen (JPY), known as CHFJPY, and trading near 112.70 around time of publication today.

Over the past few months CHFJPY has been caught in bearish channel (drawn in Red on chart below), since the last time this pair was reviewed in the Ideas You Can Trade series.

A triple bottom had been established between May and June, near 113.00, however that support line failed last week causing the pair to trade lower towards current levels -with a low of 112.59 reach in two of the last four trading days. 

Considering that CHFJPY is under the median line of the above mentioned bearish channel, the pair could still push lower and look for support on the lower line of that channel, near 111.60. 

If 113.00 can be regained, a bullish continuation would delay further bearish momentum.

Below are examples of how to trade a bearish continuation or a bullish reversal:

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 113.01 with a Limit to take profit @ 113.31 and a stop-loss @ 112.85 Risk/Reward Summary: Limit risk = +30 pips profit / (-16) Stop-loss risk = Gain to Loss ratio =  1.87

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 112.49 with a Limit to take profit @ 112.11 and a stop-loss @ 112.79 Risk/Reward Summary: Limit risk = +38 pips profit / (-30) Stop-loss risk = Gain to Loss Ratio =  1.26

Medium term daily candles:

chfjpydaily july 21 2014 note

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