CHFJPY: Long-Term Support Encountered Within Channel

The medium term daily candle chart below show the price history of the Swiss Franc (CHF) versus the Japanese Yen (JPY). This currency pair is known as CHFJPY, and is trading near 112.72 around time of publication today.

Last time CHFJPY was reviewed in the Ideas You Can Trade series it was trading around similar levels and within the medium term bearish channel where it still remains within today.

However, since that last post about CHFJPY - a breakout to the upside of the channel followed - yet that bullish momentum reversed causing prices to fall back towards current levels (back within the channel). 

While the pair is looking quite bearish again, with a downward continuation expected, a long term bullish support line has now also been encountered. This longer-term line could cause a more serious attempt for the pair to make a lasting upside breakout of the bearish channel if such a reversal occurs. 

If that long term line fails to reverse the downtrend, a continuation within the bearish channel seems more likely.

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

1.  BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 113.24 with a Limit to take profit @ 113.59 and a stop-loss @ 113.04 Risk/Reward Summary: Limit risk = +35 pips profit / (-20) Stop-loss risk = Gain to Loss ratio = 1.75

2.  BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 112.49 with a Limit to take profit @ 112.27 and a stop-loss @ 112.71 Risk/Reward Summary: Limit risk = +22 pips profit / (-22) Stop-loss risk = Gain to Loss Ratio = 1.00

Medium term daily candles:

Medium term daily candles zoomed out: