One of my favorite trades this year has been the CHF/JPY pair. This is a pair that is quite often overlooked, as it can be quite slow at times. The market had recently broken above the 118.50 level, and area that has been important for years. The market breaking above there is of course something that actually means something, so therefore I jumped all over it. It now looks as if we are ready to continue that longer-term uptrend again.
When you look at the chart below, you can clearly see that we had a major breakdown that costs this pair 400 pips. This is a huge move for this pair, but this presents opportunity that doesn’t come along very often. The market is likely to return to the uptrend based upon the fact that a lot of the panic caused by the Federal Reserve suggesting that there was a possibility of tightening in the next few years. This sent traders looking towards the yen for safety, but that has gone by the wayside.
Technical analysis suggests that we are still in an uptrend, as the 200 day EMA is far below, The recent plunge sent this market towards the 61.8% Fibonacci retracement level, and of course the 50 day EMA. Because of this – and the resulting bounce – I believe that I will continue to build a position to the upside. I like this trade, and plan on adding soon.