close icon

CHFJPY Approaching Fibonacci Resistance

It has been over five months since CHFJPY began recovering from as low as 101.74 in June. During this time, the pair managed to gain over 1000 pips and is currently trading slightly above 111.00. This impressive rally might make most people think it is time to join the new uptrend before it is too late. Truth is, the fact that CHFJPY is rising does not mean it is in an uptrend. The Elliott Wave Principle is famous for its ability to identify the trend’s direction, so let’s apply it to the weekly chart of CHFJPY and see what happens.
chfjpy-29-11-16
As visible, CHFJPY’s trend actually starts from 138.88 in January, 2015. It makes three waves to the south, labeled with 1-2-3, where wave 3 is almost exactly 1.618 times the length of wave 1, which is typical within impulsive waves. The problem is that the entire pattern is not an impulse yet. We believe it is going to evolve into one. Therefore, the current advance could be seen as wave 4 of the five-wave sequence. Fourth waves usually terminate near the 38.2% Fibonacci level of wave 3. In addition, the upper line of the trend channel drawn through the lows of wave 1 and 3 should also provide resistance in the same region. All this leads us to the conclusion, that CHFJPY might be aiming at 114.00, but the greater part of the rally is already behind us. Once this figure is reached, the pair is likely to reverse to the downside again in wave 5, which should take it to a new low below 101.70. In our opinion, long positions have a chance of succeeding only in the short-term. In the longer one, CHFJPY is still under bearish jurisdiction. Keep that in mind.



Stay informed with our newsletter

Latest Elliott Wave analysis on different topics delivered to you weekly.

Privacy policy
You may also like:

Elliott Wave Setup Helps EURUSD Add 325 Pips

EURUSD has been under pressure for over two years now. The pair reached 1.2556 in February 2018, but has been making lower lows and lower highs ever since. Yet, the past couple of weeks painted a different picture. Between May 18th and May 29th, the euro surged 325 pips against the U.S. dollar. In those…

Read More »

EURGBP Pattern Signals Bullish Reversal Ahead

EURGBP has been in free fall since March 19th, when it rose to 0.9500. A month and a half later now, the pair is hovering below 0.8730, down 8% from the peak. Is the downtrend going to continue or should we expect a change of direction? That is the question we hope to answer in…

Read More »

GBPUSD Aiming at 1.30, but May Tumble to 1.21 First

Not long ago, we shared our long-term view of GBPUSD. In our opinion, the down-phase of the pair’s cycle, which is in its 13th year now, is almost over. One last dip to 1.1000 is likely to be followed by a major bearish reversal and the start of the next up-phase. Now, we are going…

Read More »

British Pound ‘s 13-Year Downtrend Almost Over

The thirteen-year period between 2007 and 2020 started with the biggest crisis since the Great Depression and is about to end with the biggest crisis since the Great Depression. Between the two, the longest economic expansion on record took place. And while stock markets around the world reflected that recovery, some currencies have been in…

Read More »

Ahead of the Move: EURUSD Adds 500 Pips in a Week

At the start of last week EURUSD was trading below 1.0700. The pair had fallen from as high as 1.1496 in just two weeks as coronavirus cases in Western Europe kept climbing disturbingly fast. And while fundamental traders had every reason to expect more weakness, the charts were sending a different message. The Elliott Wave…

Read More »

GBPUSD Completes Pattern, Uptrend to Resume

When we last wrote about GBPUSD Britain was still an EU member. Today, that is no longer the case as the country left the Union on January 31st. On the other hand, the pair is roughly unchanged, currently hovering around 1.2900. In fact, GBPUSD has been tracking a classic Elliott Wave pattern. Take a look…

Read More »

GBPUSD To Resume Uptrend Once Correction Ends

The Brexit saga continues as Boris Johnson’s re-election puts Britain firmly on the path of leaving the EU on January 31st 2020. And while the results of the June 2016 referendum caused a crash to 1.1650 by October 2016, GBPUSD is trading near 1.3100 today. The chart below reveals the structure of the recent recovery…

Read More »

More analyses