On the night of Tuesday to Wednesday 5/6 November, the winner of the US election was announced. Donald Trump will become US President in January. This outcome caused euphoric rises on the US dollar against other currencies. One of the biggest losers was the yen (JPY). However, today’s trading shows a partial recovery of losses. In the evening, we will learn the Fed’s decision on US interest rates, but this seems to be already included and the market is expecting a 25bp cut to 4.75%. Whenever I expect volatility on dollar pairs (majors) I am more likely to look at pairs without the currency, i.e. crosses where volatility will be limited. And such a pair is CHFJPY
On the daily chart of CHFJPY, for a few days the price has been trying to break out of the halo formation formed by the daily candle on the last day of October. So far, there have already been 4 attempts to break out from the bottom, all unsuccessful. Today we have another attempt and the price is on the edge of the neckline of the Head and shoulders formation, which can be seen more clearly on the H4 chart.
If price breaks down the neckline- it can move another 260p down to the demand zone.
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The above analysis is based on the PA+MACD strategy, a detailed description of which you can read HERE . I will talk more about the PA+MACD strategy applied to these currency pairs during the live trading sessions, which you can attend from Monday to Friday.
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