CHF/JPY: Will the BOJ step in again?

It is rare that we see a Triple Top play out in the markets. I've always worked on the old adage that doubles hold, triples rarely do. However, in this instance, it has.

Obviously, BOJ intervention helped accelerate the move, but it didnt create it, The chart had already warned us it was coming.. Anyone who believes the BOJ doesn't employ Technical Chartists needs to think again. During my years at Nomura, liaising with the BOJ told a very different story. That's precisely why pattern recognition remains one of the most important disciplines in today's markets.

So, what now? Correction or Reversal?

The weekly charts still suggest this is a correction rather than a full-blown reversal. However, there is a major area of technical resistance that now has to be overcome.

23.6% Fibonacci retracement: 195.40.

Weekly Pivot: 196.44.

Previous congestion: 195.00–196.00.

This area needs to be reclaimed before the downside bias evident on the daily charts can be removed.

I would have expected the 200-day Moving Average to at least hold the first test, but price sliced straight through it without giving it a second thought. That tells me the move was driven more by panic and forced liquidation than orderly selling.

For me, 195.40 is the line in the sand.

The market needs to close above this level before Friday if it is to relieve the immediate downside pressure. Until then, I don't think traders should be chasing the downside, but equally I wouldn't be rushing to buy.

Whatever your view, one thing is clear from both the daily and weekly charts. The technical pattern was already in place before the BOJ intervened. The intervention accelerated the move, but it didn't create it. That's precisely why pattern recognition remains one of the most important disciplines in today's markets.

If you were already short before the intervention, congratulations. The panic simply accelerated the trade. But I would resist the temptation to chase prices lower at these levels. I'd rather wait and see whether the market can reclaim 195.40. A sustained move back above that level would remove much of the immediate downside pressure, although there would still be considerable work to do before I could confidently say CHF/JPY is out of the woods.

Finally, once the BOJ has intervened—even after the yen had weakened to levels not seen for decades—it plants a seed of uncertainty in every trader's mind. From now on, every sharp move in USD/JPY or CHF/JPY will carry the question:

"Will the BOJ step in again?"

Markets have a habit of pricing in bad news before the headlines arrive. The charts don't predict the news—they reflect the changing behaviour of market participants before most people recognise what's happening. That's why I've trusted price action for over four decades, and last week CHF/JPY has reminded us why.