All Trade Ideas and trading scenarios found on FX360.com are hypothetical. FX360.com has not placed these Ideas in a live trading environment. Forex Trading involves high risks, with the potential for substantial losses that exceed your initial deposit and is not suitable for all persons. Past performance is not necessarily indicative of futures results.

CHF/JPY Approaching Support, Potential Buy

Last updated 4/20/2009 1:25 PM EST (GMT -5) 0 Comments - Add your comment

• Share this:

FX360 Technical Analyst Staff

Technical Analyst, GFT

The rapidly declining CHF/JPY may be approaching short to medium-term support as prices approach bullish pattern completion near daily bull trendline support. There are elements to this particular setup that provide two different approaches to this particular entry.

With prices falling for the past few days it may seem counterintuitive to be discussing a potential buying opportunity, however, the 8hr shows both a bullish Gartley pattern (beginning with X1)and a bullish Butterfly pattern (beginning with X2) are projected to complete near 83.15. Towards the end of March we saw rapidly declining prices find support near this level (bottoming out at 83.37) before posting a sharp rally to point A. The 161.8% ABCD extension pattern that defines both patterns is also projected to complete near daily trendline support near 82.75. 

As a result we are looking to buy the CHF/JPY at 83.43 with stops at 82.23. Targets have been set just below 38.2% and 61.8% of CD at 84.93 (T1) and 86.31 (T2), respectively.

An alternative, and for all intents and purposes more conservative, strategy would be to first wait for the 161.8% ABCD extension pattern to complete near 82.75, then look to buy at 83.43 if prices do in fact rally. If prices continue to decline and move below the predetermined stop at 82.23 a loss would be avoided.

Daily Chart - 161.8% ABCD extension pattern projected to complete near bull trendline support...	2min Chart - Bullish Gartley and Butterfly patterns are projected to completed near D

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

Loading...