Technical Analysis Of CHF/JPY For The Week Of Jan 11

I am finally catching up on looking at charts for each of the currency pairs I like to trade.  One that stands out to me right now is the CHF/JPY for a nice gain in the short term, and what I feel will be a great long term play also in 2009.

Looking at the 3 hour candlesticks below, we can see that it is oversold on the RSI for the first time since November 20th.

And when we zoom in on November 20th during the RSI(21) breach, we can see that this pair immediately turned north for a nice 500 pip gain in less than 4 days.

There are several currency pairs that don’t work well with just buying below the RSI(21) at 30 and selling when above 70.  Another reason I like this trade is because I feel this pair turned south since December 27th to correct for being oversold for such a long time.  The fundamentals don’t warrant this pair to continue south.  Since I am bullish right now on the USD/JPY, I have no problem being bullish with the CHF/JPY.

One of the things that I will be working hard on during the beginning of the year is determining if there are certain pairs that I should not trade based on their incompatibility with overbought and oversold condition entries.  I am hoping to find a correlation between the most volatile currency pairs during the US and Asian sessions and their fit with quick reverses in overbought and oversold conditions.

News Releases for the Swiss Franc and Japanese Yen

There is a bank holiday in Japan on Sunday, so that is going to drastically effect the volume during the asian session of forex trading.  Japan Has three news releases on Monday, January 12th 2009.  None of these are considered red flags and shouldn’t throw off my technical analysis.

So I’m going to be all over this trade.  I’ll watch the Australian session for a bit before I get in because spreads are high and I never like to get in at the beginning before Tokyo.  Pet peeve and superstition; also good trading for my system I have found.

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