CHFJPY: The Logic Behind the Inevitable CorrectionCHFJPY recently bounced from what seemed like a perfect support level. Many likely saw this as a buy signal. But when the price failed to make a new high, it sent a clear warning: the correction isn't over yet.
This analysis dives into why that first bounce was a trap and where the next institutional levels are waiting below—the ones with the real fuel for the next major move up.
The CHFJPY pair continues its long and strong global uptrend . However, the market cannot move in one direction indefinitely without pullbacks; sooner or later, corrections occur. Large capital, or "Whales," who are the most important market participants, need to refuel with liquidity to continue their advance and to shake off piggybacking competitors. Right now, CHFJPY is in a 4H structure correction .
The first target for this correction was the 61.8% Fib level and a daily order block. The price did show a reversal reaction from them, but it lacked enough liquidity to create a new ATH, and the price continued its corrective movement. The next target for the correction will be the 78.6% Fibonacci retracement level at ~183.909, in conjunction with a 4H order block . This move will also sweep liquidity from the low of July 16th.
Two Potential Long Scenarios
SCENARIO 1: Entry from the 78.6% Fib Level & 4H Order Block
The first long entry scenario will be triggered by a clear reversal reaction from this support confluence.
► Setup Condition: Price must reach this zone, mitigate the order block, and close decisively above the 78.6% level, showing strength. An entry will require LTF confirmation (a BOS or the beginning of LTF order flow).
► Invalidation: If the 78.6% level is broken and the price closes below it, this scenario is invalid. In this case, the 4H order block itself will act as liquidity, and an attack on the 4H structure's break level (BOS 4) will likely occur.
SCENARIO 2: Entry After a Deeper Liquidity Sweep
This path becomes active if the first scenario fails.
► Setup Condition: A liquidity sweep with a candle wick below the 4H BOS level (183.333), with the price then closing back above this level. The final confirmation would be the start of a new order flow on a lower timeframe.
► Invalidation: A decisive close below the 4H BOS level will invalidate all long scenarios and will signal that the correction is shifting to a higher timeframe structure.
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The principles and conditions for forming the manipulation zones I show in this trade idea are detailed in my educational publication, which was chosen by TradingView for the "Editor's Picks" category and received a huge amount of positive feedback from this wonderful, advanced TV community. To better understand the logic I've used here and the general principles of price movement in most markets from the perspective of institutional capital, I highly recommend checking out this guide if you haven't already. 👇
P.S. This is not a prediction of the exact price direction. It is a description of high-probability setups that become valid only if specific conditions are met when the price reaches the marked POI. If the conditions are not met, the setups are invalid. No setup has a 100% success rate, so if you decide to use this trade idea, always use a stop-loss and proper risk management. Trade smart.
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