The interest rate differential between the Swiss franc and the Japanese Yen continues to favor a bearish outlook for the CHFJPY as investors curb their appetite for high-yielding assets, and the pair may work its way back to the October lows over the week as risk sentiment continues to drive price action in the currency market.
Currency Pair: CHF/JPY Chart: 30 Min Charts Short-Term Bias: Bearish
Analysis Update
After peaking to a high of 81.55 during the overnight trading session, the CHFJPY has moved lower as expected to fall back below the 120 SMA. The lack of momentum to push higher suggests that the pair may fall lower over the remainder of the trading session, but a short-term correction could be in the works as the pair moves back to the downside. Meanwhile, the Japanese yen may continue to reap the benefits of its safe haven status as investors limit their appetite for risk, and a break below last weeks low of 79.38 could lead the pair to test the October low of 78.78 over the near-term. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
The interest differential between the Swiss franc and the Japanese Yen continues to favor a bearish outlook for the CHFJPY, and may work its way back to the October lows over the week. After gapping at the beginning of this week’s session, the pair jumped higher to fill-in the gap and has cross above the 120 SMA. Despite the minor rally after the open, I anticipate the pair to hold within the downward trending channel, and expect the franc-yen to work its way towards the October lows over the week. In addition, the RSI continues to push its way towards the overbought territory, which suggests that the CHFJPY may pare its gains over the next few hours. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
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