Potential short play on the CHFJPY daily charts

FX:CHFJPY   Schweizer Franken/Japanischer Yen
There is a setup on the daily charts for CHFJPY that I've been following for the past two weeks now. Basically, we can see a very nice market top reversal at a significant previous swing high and resistance level . If the current daily bar manages to break and close at or below the 113.000 level, I believe a further move to the downside is likely.

This is a prime example of a rounding top reversal at a solid previous resistance zone . The price has been in an uptrend for the past 2 months and has been rounding off since the beginning of May. The flattening of the uptrend was clearly visible from the RSI divergence (we could see the higher highs on the price chart diverging from the lower highs on the RSI indicator). At this point, the price has begun to make lower highs and while the price is currently still ranging, the bears seem to be getting more and more in control. The price is moving lower as a result.

What needed to happen for me is two things: the price needed to break through the upwards trendline (the black line) and also needed to close below a local support zone (the blue-ish horizontal rectangle ). We broke the trend line and are now very close to breaking that local support as well. If the price manages to close at the lows of that support zone , it would also be a very nice example of a pin and drive entry trigger (marked in orange).

Potential economic news releases to keep in mind are the SNB interest rate decision tomorrow and the BoJ interest rate decision on Friday.

This and other setups are described on my website, where you can find my weekly forex outlook.

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