After making a swift break higher to fresh yearly highs in the first few sessions of the month, CHF/JPY has since fallen onto the backfoot. A swift decline for the pair from overbought conditions has seen seven losing sessions out of the last eight. As mentioned, the pair’s robust melt higher saw the relative strength index (RSI) approach 80, indicating severely overbought conditions were present.
The move lower over the last couple of weeks has been constrained by overhead trendline resistance, which has guided price lower. Price may continue to guide lower to the previous yearly high of 122.771, a level which may act as a key pivot point. With sellers firmly in control of this cross, traders may look for a test of the 50-day moving average should the previous yearly high fail as support.
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