Two Safe Havens, the CHF/JPY, Close to a Major Sell Signal
The main Forex market story today is for sure the unprecedented drop of the Russian Ruble. Hard to say how big as it varies. Over the weekend, in some banks, the exchange rate was even 150 for 1 USD. That’s really unbelievable. We will leave this currency today and move towards safer ones. Actually, two currencies, the CHFJPY.
The CHFJPY is in a rather bearish situation on the chart. What we can see now is the massive Head and Shoulders pattern (yellow). The price is above the neckline (red) and all we need for a proper sell signal is the breakout of this dynamic support. If that breakout happens, the sentiment would turn negative and the potential target for the drop would be the green horizontal support at 122.5.
In case that isn’t enough and the drop continues, the next target would be the black long-term up trendline, which connects higher lows since May 2020. All that is a negative scenario and again, it will be on the table only if the price breaks the red neckline. As for now, we are still above, so buyers are still ahead.
For a look at all of today’s economic events, check out our economic calendar.