The CHF/JPY pair is one that most of you probably don’t pay too much attention to, but having said that I believe it is a very important market as it shows which “safety currency” the Forex traders are willing to invest money in. By looking at this chart, you can certainly see that there is a significant amount of bearish pressure on the Swiss franc, and certainly the Japanese yen is favored. That’s true of a lot of the Japanese yen and Swiss franc related pairs, so it makes perfect sense that we would see it in this market.
The markets have been very bearish for quite some time, and as a result we broke through the 119 level. This is an area that had been supportive in the past, so having said that it should now be resistance. If we rally from here, I feel that a lot of selling pressure will enter the market at roughly 119, and as a result I believe that a resistive candle was an excellent selling opportunity. However, this market is looking more and more likely to be one that is an even going to be able to bounce.
Breakdown
The breakdown that I see coming is on a move below the 170 handle. That is an area that had been previously resistive, several years ago and as a result it makes sense that the market would recognize this as potential support. A break down below here though signifies that the longer-term trend is most certainly going to continue, and the Swiss franc will continue to soften in general.
The Swiss franc has been worked against by the Swiss National Bank recently, and as a result it makes sense that this market will continue to go lower. After all, it is a bit of a “knock on effect” from the other CHF related pairs, so having that going on at the same time as the strength in the Japanese yen against other currencies, I believe that this will be a very nice trend to follow.
