Chf-jpy
Bounce off trendlineNew Bounce off trendline showing signs of strength, or weakness in JPY, this might actually break through that resistance of 112.10 to to continue higher to to 113
Risk Reward 1.74
Higher Highs, Higher LowsPair is trending higher with higher highs and higher lows
It just recently bounced off the trendline and is making a move back higher to 112.10
Risk Reward 1.56
Down stairsMarket pressure highlight a short movement for this cross.
Long term pressure -5.1 is good enought to move the cross below the next important support and short term market pressure confirm that the movement already is started.
This analysis is based on market pressure.
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SWISS INVESTORS SHOPPING ABROADSwiss private investors are underinvested in foreign assets as they have refrained from foreign portfolio investment since 2016 and pension funds hold high FX hedge ratios on their bond and equity portfolios. If CHF is no longer strengthening, the incentive to roll on their hedges is lower, suggesting less CHF buying. As Eurozone breakup risks remain low and the ECB is embarking on a path of gradual policy normalization while the SNB remains accommodative, there is a higher incentive for Swiss private investors to invest abroad in search of yield, weakening the CHF. The sight deposits data also suggests that the SNB has resumed its FX interventions recently after EURCHF fell to the 1.15 level, limiting the CHF upside. This is not often said with JPY, but this is a positive carry trade. The risk to this trade is the SNB changing its reaction function.
CHF SNB Not Changing Yet Bearish
Watch: Sight Deposits, SNB Rates Decision
We maintain our bearish bias for CHF. The SNB rates decision is the main risk event in the coming week, where we do not expect them to change their accommodative stance given uncertainty over the impending vote on the sovereign money initiative in June, inflation still below 1%, and the growth recovery just starting. This should drive Swiss investment abroad in search for yield, especially as Eurozone breakup risks remain low. Based on the sight deposits data, the SNB has returned to intervene in the FX markets when EURCHF was hovering around the 1.15 level, limiting the upside for CHF.
JPY in Risk Rebound Neutral
Watch: BoJ Rates Decision, Labor Cash Earnings, PPI, Weekly Security Flows, IP
In the short term, we think there is scope for USDJPY to rebound to 108 as risk appetite rebounds with the US 10y real yield coming down from its recent high of 82bp. Despite recent protectionist rhetoric, we think China wants to maintain strong global growth to support internal rebalancing and the lower USDCNY lends support to this view. As trade tensions ease, global fundamentals remain in place, and earnings perform well, we see JPY under temporary selling pressure. In the long term, we remain bullish on JPY as we expect risk appetite to soften in 2H18.
Credit to Morgan Stanley Research
CHF/JPY 1H Chart: Franc could go for breakoutThe Swiss Franc has depreciated substantially against the Japanese Yen since early February when it was located near the 118.55 mark. This downward-sloping movement has been guided in a descending channel. The Franc failed to reach its bottom boundary last week, suggesting that this bearish formation might not hold any longer.
The strong hourly surge mid-session sent technical indicators in the strongly bearish area. Thus, it is likely that bulls relieve their upside pressure and allow for a short-term correction towards the 55– and 100-hour SMAs circa 112.80 or the weekly S1 at 111.85 if strong downside risks prevail in the market.
However, the pair should eventually breach the 200-hour SMA during the following trading sessions and approach the lower boundary of the previously-breached senior channel near 114.60.
CHFJPY AB=CDEntry - 112.960
SL 112.300
TP1 - 114.700
TP2 - 115.150
Red Dotted lines are temporary S&R levels
Orange lines are more well respected S&R levels
Chf Jpy SchlongSince October 2016 - Summer 2017 we were more or less in a nice upward trend which slowly turned into a big range as you can see last try to break the summer 2017 High failed and on its way down price breaks through a nice upward trendline ( a nice short trade by the way)
Now we just testing the low of the range outside of the trendline which could lead to 2 different scenarios .
1) Price is able to break this support and starts to sell off , we have anough open space to the downside to to give us a healthy short trade after a break n close through the support .
2) Price gets rejected from the support and starts a bullish move to the upside with intention to retest the broken trendline before further downside momentum
CHFJPY on major support, prepare for a possible bounce!CHFJPY is testing major support at 115.89 (Fibonacci retracement, horizontal overlap support, Fibonacci extension, Elliott wave structure) and a bounce could occur at this level to drive price up to at least 117.05 resistance (Fibonacci retracement, horizontal overlap resistance).
Stochastic (55,5,3) is seeing major support above 1.5% where a corresponding bounce could occur.
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CHFJPY testing major support, prepare for a bounce
Buy above 115.90. Stop loss at 115.44. Take profit at 117.10.
Reason for the trading strategy (technically):
Price is testing major support at 115.90 (61.8% Fibonacci extension, horizontal overlap support, Fibonacci retracement) and we expect a strong bounce from this level to push price up towards 117.10 resistance (50% Fibonacci retracement, horizontal overlap resistance).
Stochastic (55,5,3) is seeing major support above 5.9% where we expect a corresponding bounce from.
