Chart Art: CHF/JPY Hovers Above Triangle Support Ahead of BOJ

CHF/JPY has been consolidating inside its symmetrical triangle pattern, possibly gearing up for a bounce or breakout as the Bank of Japan decision is coming up.

Will a surprise announcement spur a big move in either direction?

Check out these key inflection points on the 4-hour time frame.

CHF/JPY: 4-hour

The Swiss National Bank (SNB) has kept policy unchanged for quite some time, though the central bank has started to lean less dovish after seeing some green shoots in economic data.

Meanwhile, the BOJ is widely expected to keep rates on hold this week, following a tightening move in their previous decision. Still, a hawkish tilt or currency jawboning could give the yen a slight advantage.

Are we about to see a CHF/JPY triangle breakdown?

CHF/JPY is bouncing off its triangle bottom and testing the pivot point (190.73). Clearing this hurdle could open the path for a test of the triangle resistance near R1 (191.48) or perhaps a break higher to the upside targets at R2 (192.83) then R3 (193.58).

On the other hand, should the near-term ceiling around the pivot point and 100 SMA dynamic inflection point keep gains in check, the pair could dip back to the triangle support near the 190.00 major psychological mark.

Keep your eyes peeled for long red candlesticks closing below this area since a breakdown could drag CHF/JPY to the next bearish levels at S1 (189.38) then S2 (188.63).

Volatility is likely to pick up during the actual BOJ decision and Ueda’s press conference, so make sure you exercise proper risk management when trading this pair around a top-tier event.