- The Swiss franc fell rather hard against the Japanese yen during early trading on Wednesday but has seen a little bit of a push back near the ¥171.50 level.
- An area that previously had been pretty significant resistance.
- With that being the case, we have a little bit of a decision to make here at this point.
I still believe that you are buying pretty much anything against the Japanese yen, and that even includes the lowly Swiss franc. If we break down below the ¥171.50 level, then I think the 50 day EMA could be your next major support level. And then after that, the ¥167 level, which is now attracting the 200 day EMA. Regardless, I think you are looking to buy dips.
Now the question is whether or not the ¥171.50 level has offered that support that you can buy into, or if we need to reset. As things stand right now, the bounce has been somewhat muted. So we'll have to wait and see. The ¥172.60 level above is a short term barrier that will try to get above, and if we do, then I think it opens up a move to the ¥175 level.
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Keep in mind that the Bank of Japan has recently intervened, but that's about the only thing that stopped the selling of the Japanese yen and the appreciation of all of these other currencies against it. The signs of the candlestick on Wednesday, of course, is somewhat telling. But really, when you look at the longer term trend, it's been a blip on the radar.
I Remain Bullish
So therefore, I remain bullish, especially considering that you get paid at the end of the day to hold this pair, even though it's not that much. As long as the Bank of Japan is stuck with keeping monetary policy extraordinarily loose, even the lowly Swiss franc will probably continue to make moves against the Japanese yen. With this being the case, I tend to use this chart as an idea as to which funding currency I want to use in other trades, but the pair itself should continue to rise also.
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