In our view, the situation in the FOREX market is rather stagnant. Most currency pairs are flat in channels, which limits the possibility of making a profit. Today, we are using technical analysis in analyzing the CHF/JPY pair.
The key moment for this pair is to study different periods. We can see a contradiction in the way the price moves, which leaves room for traders’ manoeuvre.
First, let’s look at 1H TF:
1. The pair is testing the 200EMA with a possibility of a rebound to the top.
2. The lines of the MACD indicator are directed downwards, which confirms the bearish trend. Also the MACD line has moved away from the signal line of the indicator, which suggests a possibility of a buy signal.
3. Williams% R oscillator has returned from the oversold zone.
However, when we switch to a higher 4H TF, the picture is somewhat different.
The first thing that catches our eye is the 200 EMA’s movement direction. It is clear that the trend is bearish. In addition, we can see 4 indicators giving signals to sell the franc. The first one is that the lines of the MACD indicator are quite close, the second one is the moving average crossing the price, and the last one is the reversal of the Parabolic SAR indicator.
In conclusion, having analyzed the currency pair on different time frames, we are most likely to open short positions.