I am going short CHF/JPY in the 85-90 range. I think this currency pair is about to start downtrending toward new lows.
Notice in the daily chart above that CHF/JPY has been consolidating the massive drop from July thru December of 2008. After 5-waves down, we now see a 3-wave flat formation. Notice that the 38.2% and 61.8% fibs of the entire uptrend from 2000-2008 have been containing price action over the past 4 months. Price has run into strong resistance in the 87 zone, and it should stay below this level.
Zooming into the daily chart, you can see that the 4-month correction has unfolded in the distinct Flat correction formation, where wave-a is 3-waves, wave-b is 3-waves, and wave-c is 5-waves. Wave-c = Wave-a, and price has formed MACD divergence at the recent high. The bearish engulfing candle from Friday is a good indicator that the trend has reversed.
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