Since June of last year, the Swiss franc was able to make up a good 1300 pips against the yen. Since January, the signs have shifted and the Japanese currency has regained some ground once again.
A small but significant downward trend has formed, visible in the daily chart (image 1). This has already gone through a deep correction, meaning that is has become interesting for us once more. Renewed weakness in the franc could lead to a continuation of the downward trend and provide the possibility for a profitable short trade.
If a subordinate trend such as in image 2 develops, this could be used for trading. However, a general entry with a somewhat larger stop would also lend itself. Possible targets for initial profit takings would be the low of the last movement as well as the intersection between the trend line and trend channel.
Before making an entry, one should take news from the appropriate countries into account. Similarly, one should also keep an eye on the interest rate development of the large economic areas and the commodities market.
Disclosure of possible conflicts of interest:
At the time of publishing this article, the author is not invested in the securities or underlyings discussed.
Exchange transactions are associated with significant risks. Those who trade on the financial and commodity markets must familiarize themselves with these risks. Possible analyses, techniques and methods presented here are not an invitation to trade on the financial and commodity markets. They serve only for illustration, further education, and information purposes, and do not constitute investment advice or personal recommendations in any way. They are intended only to facilitate the customer’s investment decision, and do not replace the advice of an investor or specific investment advice. The customer trades completely at his or her own risk.