After a sharp decline in the CHFJPY a bearish flag has formed. Within this appears a bearish Cypher pattern requiring an uptick for CD completion at the 78.6% level. This acts as an entry for a short trade which sees a retest of the bearish flag lower bound and breakout to the downside, seeking the 112.5 support level. Risks to this include an oversold RSI on the daily and preceding support levels of the flag and pivot points.
This trade hinges on the uptick for a Cypher completion. RSI currently standing at 47.2 meaning there is room to the upside for this completion to occur. The 78.6% entry level is unfavourable due to a mild violation of the flag upper bound required to trigger.
Targets include a 38.2% retrace level of the CD leg, either the 'C' level or the lower bound of the flag and the 112.5 support level. Stop/loss at a minimum could be the 'X' level of the Cypher.
This trade hinges on the uptick for a Cypher completion. RSI currently standing at 47.2 meaning there is room to the upside for this completion to occur. The 78.6% entry level is unfavourable due to a mild violation of the flag upper bound required to trigger.
Targets include a 38.2% retrace level of the CD leg, either the 'C' level or the lower bound of the flag and the 112.5 support level. Stop/loss at a minimum could be the 'X' level of the Cypher.