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Short-Term Technical Outlook: CHF/JPY (Update)

Monday, 27 October 2008 11:10:00 GMT  |  David Song, Currency Analyst

Fading risk sentiment paired with narrowing demands for carry trades have certainly strengthened the Japanese yen, and led the CHFJPY to reach its lowest level since 2004.

Currency Pair: CHF/JPY
Chart: 60 Min Charts
Short-Term Bias: Bearish

Analysis Update

                The CHFJPY has moved in our favor over the last few hours of trading, and should continue its move to the downside over the week as investors continue to move out of high-yielding assets. After falling to an intraday low of 78.96, the pair has bounced slightly higher, but the failure to move above 81.50 suggests that the pair may end the day near the low. Over the next few days, I anticipate increased selling pressures to lead the pair lower, and may test the 3/7/02 low of 75.74 on its way to the downside. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.

 

Analysis

                 Fading risk sentiment paired with narrowing demands for carry trades have certainly benefitted the Japanese yen, and has led the CHFJPY to reach its lowest level since 2004. Last week, I noted that the pair broke to the downside after holding within narrow range between 86.50 and 91.25, and the swissie-yen has fallen considerably since then to break below major support levels. Increased selling pressures have pushed the pair to an intraday low of 78.78 during the session, and we may see the pair work its way back towards the low over the next few hours. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.

 

To contact the author of this article, please email: dsong@fxcm.com

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