CHFJPY as a result of declines lasting since June 2015 reached critical support area of 104.00 converging with:
- Retracement 61.8% of the Fibonacci correction from the last growth impulse,
- Retracement 50% of Fibonacci correction from all previous upward movement,
where in October last year there was a demand response.
As a result of upward momentum pair reached local (blue) resistance, converging with the 50% Fibonacci correction from the last downward impulse, where in July there was a supply response.
Looking at the daily chart it is worth noting that as a result of recent falls CHFJPY has overcome extremely important support at level 115.15 and reached as far as next technical level, where today demand response has occurred. In near future, we expect that we could deepen the upward correction and re-test the already mentioned level 115.15, which now coincides with the 38.2% Fibonacci correction of the last decline. Rejection of this zone could open the way for further declines.
It is also worth noting that re-testing and rejection of this resistance could create the right shoulder of head & shoulders bearish formation
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In order for the growth to continue we will have to overcome local resistance that we are currently testing seen on H1 chart. On the way to assumed zone there is also a resistance at 114.76 level, where we also expect supply reaction.
