Technical Sentiment: Bullish
Key Takeaways
- Higher swing low formed on 61.8% Fibonacci Retracement at 112.11;
- CHF/JPY buyers face strong resistance at 113.50;
- Possible targets include 114.12 and 114.80.
Swiss Franc is showing strong bullish intentions against Yen as short positions unwind at a face pace.
Technical Analysis
CHF/JPY technical landscape has been very predictable in recent weeks, without any fake signals, at first respecting a bearish configuration and more recently forming a strong reversal pattern. With a relatively light news calendar, we expect traders to act in a foreseeable way during today’s U.S. trading session and early next week as well.
After last week’s downtrend invalidation, when price broke rallied above the most recent lower highs at 112.80 and 112.95, CHF/JPY retraced for most of this week. Once price hit 61.8% retracement level was hit in the early hours on Thursday, large offers lifted price throughout the day, forming a bullish engulfing bar on Daily.
Free Reports:
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
Get our Weekly Commitment of Traders Reports - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Spot is currently trading around 113.45. Sellers are still defending 113.50 (20th October high, 200 Moving Average on 4H and 38.2% Fibonacci level on September – October downswing), yet bullish momentum still points to a breakout. A successful breach and close above 113.50 will confirm CHF/JPY is turning bullish from a swing perspective. Upside targets are begin at 114.10 (50% Fib), with a large resistance cluster between 114.50 and 115 being the main area of attraction for buyers.
*********
Prepared by Alex Z., Chief Currency Strategist at Capital Trust Markets
