CHF/JPY dropped sharply earlier this week, enough to hit a key support zone.
Can the pair maintain its long-term trend? Or will we see a breakout today?
It’s a battle of the safe havens today as we check out what’s up with CHF/JPY’s daily chart!
CHF/JPY Daily Forex Chart by TradingView
I don’t know if you’ve noticed but CHF/JPY has been trading in an observable uptrend all the way back in 2020.
Before we act on that tidbit, we must remember that directional biases and volatility conditions for market price are typically driven by fundamentals. If you haven’t done your fundie homework on the Swiss franc or the Japanese yen yet, then it’s time to do some work by checking out the forex calendar and stay updated on daily fundamental news!
If you have done your homework and you’re leaning towards a bias, then we can take a closer look at CHF/JPY’s daily time frame. See, the pair saw a yuuuuge downswing yesterday after BOJ officials hinted at potentially ending their negative interest rate policies.
The possibility of hawkish (or less dovish) policies drew in tons of forex bulls and pushed JPY higher against major counterparts like CHF.
But that was yesterday. Despite the pro-JPY update, CHF/JPY managed to stay above its ascending channel support. In fact, the pair looks like it’s finding enough buyers to trade above the S2 (163.67) Pivot Point level!
The S2 Pivot Point line, ascending channel, and 100 SMA support could attract forex bulls who believe that CHF/JPY can maintain its uptrend in the next couple of days. Watch the next candlesticks to see if the bulls can get a bounce and then a momentum going from its current prices!
But what if yesterday’s bearish candlestick doesn’t turn out to be an outlier and that we’re seeing the start of a longer-term reversal?
If it turns out that JPY is ready for sustained gains, then we can also watch out for clear downside breakout signals.
A sustained break below the S2 and channel support, for example, will have pretty good odds of drawing in CHF/JPY bears who can put a move back to 160.00 or 155.50 on the table.