- The CHF/JPY pair is not one that a lot of people trade, but it is a crucial pair nonetheless.
- After all, these are 2 of the biggest funding currencies in the world when it comes to the carry trade, and understanding where this pair is going can be a huge boost to how you trade other currency pairs.
As we see the Swiss franc losing strength, that does suggest that you are going to be better off shorting the Swiss franc against other currencies then you would be the Japanese yen. This is not to say that you can’t make money doing both, just that you will get more “bang for your buck” shorting the CHF.
Technical Analysis
We are right in the middle of the 50-Day EMA and the 200-Day EMA indicators. This suggests that we could be in an area that buyers could return, but right now this is a pair that seems to be somewhat comfortable just grinding a bit lower. The Japanese yen has gotten a little bit of a boost as of late due to the fact that the Bank of Japan decided to raise interest rates for the first time in years. However, keep in mind that the interest rates in Japan are just 0.1%, so is not exactly like you get paid to hold the Yen.
Ultimately, this is a market that I think it will end up being a great technical indicator if you pay close attention, and I do think that given enough time we probably have a real shot at trading many of the other carry trades using this as an indication. As far as trading this particular pair, you will have to be patient because it doesn’t move very quickly.
If we turn around and take out the ¥169 level, then I think the Swiss franc will continue to climb, perhaps reaching toward ¥172 level. If we break down below the 200-Day EMA underneath, which is extensively at the ¥165 level, then we could see the Japanese yen strengthened not only against the Swiss franc, but probably multiple other currencies as well. Whether or not you trade this market is irrelevant, but it is one you should be paying attention to.
Ready to trade our Forex daily forecast? We’ve shortlisted the best currency trading platforms in the industry for you.