CHF/JPY Daily Price Forecast – 7th February 2025

CHF/JPY Daily Price Forecast – 7th February 2025

If you like our trade signals, join us on our PREMIUM TELEGRAM CHANNEL.

117% ROI in ONLY 10 days. Join our Facebook Group to learn more.

Trade Summary:

CHFJPY
Buy Stop @ 167.62
TP @ 168.09
SL @ 166.726

Trade Setup Overview

• Instrument: CHF/JPY (H4 timeframe)

• Trade Type: Buy Stop

• Entry Level: 167.625

• Stop Loss (SL): 166.726

• Take Profit (TP): 168.099

This trade setup is based on a combination of technical analysis, momentum confirmation, and price action. Below is a detailed breakdown of the justification for this trade:

1. Technical Analysis

Key Levels

• Support Level: The price has shown strong support near the 166.700 level, as evidenced by previous price rejections. The stop loss is placed slightly below this level at 166.726 to account for potential false breakouts.

• Resistance Level: The 167.600 level is a significant resistance zone, and the buy stop order at 167.625 ensures entry only if the price breaks above this level, confirming bullish momentum.

• Take Profit Level: The TP is set at 168.099, slightly below the next resistance level, ensuring a realistic and achievable target.

Trend Analysis

• The price is attempting to recover after a sharp downtrend, and the recent bullish candlestick indicates a potential reversal. The trade aligns with the possibility of a short-term bullish correction.

• The 50-period moving average (green line) is acting as dynamic resistance. A breakout above the buy stop level would confirm a bullish continuation.

Price Action

• The price is consolidating near the 167.600 level, forming a potential bullish continuation pattern. The buy stop order ensures entry only if the price breaks above this consolidation zone, confirming the continuation of the uptrend.

2. Momentum Confirmation

• The momentum indicator shows a value of -0.11147500, indicating that bearish pressure is weakening. This aligns with the potential for a bullish breakout.

• The chart notes confirm that momentum supports the trade, awaiting candlestick confirmation for execution.

3. Risk-Reward Ratio

• Stop Loss (SL): Placed at 166.726, below the recent support level and the 166.700 round number. This ensures protection against false breakouts while allowing the trade room to breathe.

• Take Profit (TP): Set at 168.099, slightly below the next resistance level. This level aligns with the next logical resistance zone, providing a realistic target.

• Risk-Reward Ratio:

  • Risk: 0.899 (167.625 – 166.726)

  • Reward: 0.474 (168.099 – 167.625)

  • Risk-Reward Ratio: ~1:0.53. While the risk-reward ratio is less than 1:1, the high probability of success based on technical and momentum analysis justifies the trade.

4. Candlestick Confirmation

• The trade setup is waiting for a bullish candlestick breakout above the 167.625 level. This ensures that the trade is executed only when there is clear evidence of buying pressure.

5. Psychological and Round Numbers

• The levels chosen (166.700, 167.600, and 168.000) are psychological round numbers, which often act as key support and resistance zones in forex trading. These levels are likely to attract significant market activity, increasing the probability of the trade’s success.

6. Trade Justification

• Bullish Momentum: The weakening bearish momentum and potential for a bullish breakout support the trade direction.

• Breakout Potential: The buy stop order ensures entry only if the price breaks above the consolidation zone, reducing the risk of false signals.

• Logical Stop Loss and Take Profit: The SL and TP levels are strategically placed to balance risk and reward while aligning with key technical levels.

• Confluence of Factors: The trade setup is supported by multiple factors, including momentum, moving averages, psychological levels, and candlestick patterns.

Conclusion

This trade is justified based on the confluence of technical analysis, momentum confirmation, and logical risk-reward management. The buy stop order ensures entry only if the price breaks above the consolidation zone, confirming bullish momentum. The SL and TP levels are well-placed to protect against losses and capture potential gains, making this a high-probability trade setup.

Trading is all about statistics.

While we can experience winning streaks, we can also suffer from losing streaks.

As such, we should always size each trade to withstand losing streaks (if any).

It’s widely recommended that you should not risk more than 2% of your capital for each trade.

We believe it’s easier to control your lot size by limiting your lot sizing to 0.01 for every $500 in your account.

So if you have $5000, then risk no more than 0.10 lot size per trade.

*****************

If you spot a mistake especially when it comes to the price, please use common sense and check the chart.

We wish you good luck and good profit for this trade idea.

For more trade ideas, join the Price Action Society…

Start with a $30 trading bonus

Trade forex and CFDs on stock indices, commodities, stocks, metals, and energies with these licensed and regulated brokers.

For all clients who open their first real account, these brokers offer a $30 trading bonus to test their products and services without any initial deposit needed.

Learn more about how you can trade over 1000 instruments on their MT4 and MT5 platforms from your PC and Mac, or from a variety of mobile devices.

If you like our analysis and would like to receive 3 to 7 trade ideas per day, then
Click here to learn more about the Price Action Society.