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CHFJPY – Candles Warn Rebound Over

Technical Bias: Bearish

Key Points

  • Swiss Franc managed to gain bids against the Japanese Yen, but it looks like a short-term correction phase is now complete.
  • Japanese Securities investment, released by Ministry of Finance came in at ¥119.8B, which was higher compared with the last revised reading of ¥-26.2B.
  • Japanese Leading Economic Index released by the Cabinet Office came in at 107.2, up from the last reading of 106.2.
  • Swiss SECO Consumer Climate released by the State Secretariat for Economic Affairs SECO posted a decline to -19 in Q3 2015.

Technical Analysis

The Swiss franc after falling close to 126.80 support area against the Japanese Yen traded higher and broke an important hurdle. However, there is a bearish trend line formed on the hourly chart of the CHFJPY pair, which prevented gains. The best part is that the 61.8% Fib retracement level of the last drop from 128.22 to 126.79 was also around the trend line to act as a barrier.


Overall, this can be seen as a failure, and the CHFJPY pair might continue trading lower.

The 100 and 200 hourly moving averages are also aligned on the upside to act as a resistance.

Swiss SECO Consumer Climate  

Earlier today, SECO Consumer Climate, which shows trends in Consumer Climate and is as an important indicator of inflation was released by the State Secretariat for Economic Affairs SECO. The market was not expecting any major decline in the Consumer Climate. However, the outcome was disappointing, as the SECO Consumer Climate fell to -19 from -6 between April and July 2015.

The report stated that all four questions included in the calculation fell, including the Consumer expectations with regard to future economic development declined to -25 from -8. The highlight was that “Consumers were also less positive in July (+18 points) about their savings possibilities over the next 12 months compared to April (+31 points)”.

There was noticeable bearish pressure on the Swiss Franc after the release. The CHFJPY pair retreated from the highs and started to show signs of a reversal.

Trade Idea

Selling rallies closer to the highlighted trend line resistance area is a good option.

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