CHF/JPY bounces off 38.2% Fibonacci but the bullish outlook remains in play.
CHF/JPY had another bearish start on Wednesday, with the price remaining below the 38.2% Fibonacci retracement level of the up-leg from 108.50 to 118.05, around 114.40. Technically, in the daily timeframe, the Relative Strength Index (RSI) is moving south in the positive zone, while the MACD oscillator is losing momentum, despite that it stills stands above the trigger and zero lines.
A further reversal to the downside, could find obstacle near the 20-day simple moving average (SMA) around 113.50 before touching the 50.0% Fibonacci of 113.30. Falling lower, the bears are eagerly awaiting to test the medium-term ascending trend line near 112.90, where a decisive close below this line, could indicate that the rally off 108.50 might be running out of steam, with traders probably looking for support first at the 112.20 mark and then at the 111.60 level.
On the upside, there is immediate resistance around the 114.40 barrier halting further advances. A successful break of this level could retest the obstacle around the 23.6% Fibonacci region of 115.80.
Overall, looking at the long-term timeframe, CHF/JPY has been trading in a sideways channel since November 2016 with upper boundary the 118.50 level and lower boundary the 108.00 level. However, in the medium-term, the price has been creating an ascending movement.
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