CHF/JPY Analysis: Potential Reversal SetupIn this chart, I'm analyzing a potential bullish reversal in the CHF/JPY pair after a downward trend. The price has been moving within a descending channel, with lower highs and lower lows, indicating a bearish sentiment. However, it recently hit a strong demand zone between 174.100 and 174.200, where buyers seem to have stepped in, pushing the price upward.
Technical Observations:
Breakout of Descending Channel: The price has broken out of the descending channel, which could signal a reversal of the downtrend.
Demand Zone Support: The green zones between 174.100 and 174.400 acted as support, creating a base for buyers to initiate an upward movement.
Target Levels: If the breakout is sustained, my first target is around the 174.685 level, with a secondary target at 174.920, and 175.160 as final target which aligns with previous resistance levels.
Stop-Loss: I've set my stop-loss below the demand zone at 174.093 to protect against potential downside risk if the breakout fails and price re-enters the channel.
Trading Plan: I'm looking for a potential long position here, with the breakout from the channel acting as a confirmation for a bullish move. Watching for strong buying momentum to sustain, I’ll look to manage the trade carefully with a close eye on any signs of reversal back into the channel.
Disclaimer: This analysis is for educational purposes only and should not be considered financial advice. Trading involves significant risk, and you should always conduct your own research and consult with a professional financial advisor before making any investment decisions. Past performance is not indicative of future results. Trade responsibly.
