CHFJPY - Identify These Moves - FULL Breakdown 📚

A key part of technical analysis is to identify the different phases and patterns in the market.

So, what can we see?
- We can see that we're within a major ascending parallel channel and price has been respecting it. When price approaches either extremes of the channel, it rejects aggressively.
- There are 2 key phases at play here. The blue phase is the impulse and the red phase is the correction.
- The impulse phase is an upward movement and the corrective phase is a downward move

After identifying these phases, what next?
- So now that we know that the impulse phase ends at the upper limit of the channel, we know there's a corrective move coming back down to the channel support.
- If there's enough momentum, we can break the channel support and keep falling. As we're in an ascending channel, it is often a reversal pattern = there's a high chance that CHFJPY can come back down all the way to 109
- Now we need a trading plan to enter this trade

How do we trade it?
- The risk entry would have been at the rejection of the channel resistance
- The safe entry would be to identify when the impulse has ended. One way we can do this is by identifying when the uptrend has ended. This can be done by using a trendline (like the one we have) and watching for a break to indicate that the uptrend has ended and the next phase has begun.

Trade Idea:
Watch for the ascending red trendline to break and enter with stops above the channel.
First Target: Target the channel support for first targets (500pips)
Second Target: The bottom of the channel (1,600pips)

Hope this breakdown was helpful. If so, do leave a like and comment what you think!

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CHFJPY Update -