CHF/JPY Technical: Bullish exhaustion sighted below the key resistance of 166.60

  • The recent four months of bullish acceleration may have reached a major climax condition at 166.60 resistance.
  • The short-term minor trend of CHF/JPY has turned bearish as it traded below the prior upward-sloping 20-day moving average.
  • Watch the key short-term resistance at 165.60 on CHF/JPY.

This is a follow-up analysis of our prior report, “CHF/JPY Technical: Relentless uptrend movement” published on 31 August 2023. Click here for a recap.

After recording an accumulated gain of +2,378 pips since January 2023, the cross pair CHF/JPY seems to have lost its bullish mojo as it failed to make any headway above the 166.60 key major resistance and broke below its medium-term support at 164.50 (defined by the lower boundary of an ascending channel from 20 March 2023 low) yesterday, 11 September.

A major bullish climax may have been reached

Fig 1:  CHF/JPY long-term term secular trend as of 12 Sep 2023 (Source: TradingView, click to enlarge chart)

The recent bullish acceleration move in the past four months may have reached a climax where price actions at the end of August 2023 formed a monthly bearish “Spinning Top” candlestick pattern coupled with the 3-month RSI oscillator hitting an extreme all-time high overbought level of 80.79 at this time of the writing based on data available since April 1972.

Short-term momentum has turned bearish

Fig 2:  CHF/JPY minor short-term trend as of 12 Sep 2023 (Source: TradingView, click to enlarge chart)

Since 7 September 2022, the CHF/JPY has pierced below its 20-day moving average and started to form a series of “lower highs” and “lower lows”.

In conjunction with the 1-hour RSI oscillator that has also traced out similar “lower highs” below a parallel descending resistance at the 57-level which suggests short-term bearish momentum of price actions remains intact.

Watch the 165.60 key short-term pivotal resistance (also the 20-day moving average) and a break below the intermediate support at 163.80 (former minor range resistance of 21 July to 8 August 2023 & the 50-day moving average) may trigger a further impulsive slide to see the next support coming in at 162.10 in the first step.

However, a clearance above 165.60 negates the bearish tone for a push-up to retest the 166.60 key major resistance.

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Kelvin Wong

Kelvin Wong

Senior Market Analyst, OANDA at OANDA
Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities. Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets. In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.