2026-01-07 02:22:00
This franc pair has been forming higher lows connected by an ascending trend line, and it looks like this area of interest is about to get tested soon.
Are buyers waiting to hop in?
Check out this area of interest visible on the 4-hour time frame!
The Swiss National Bank’s (SNB) refusal to cut interest rates to negative territory despite weak inflation has kept the franc afloat towards the end of the previous year.
Around the same time, political pressure to boost economic stimulus has weighed on the Japanese yen, along with currency intervention fears.
With that, CHF/JPY staged a pretty steady climb until the 198.50 minor psychological mark held as resistance early this year. Can it find more bullish energy to break higher?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Swiss franc and Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
Price is retreating to the support zone at S2 (196.48) which is also close to another minor psychological level. A larger pullback the 50% level that’s around a former resistance zone, the rising trend line, and the 200 SMA dynamic support.
The 100 SMA remains safely above the 200 SMA to suggest that the path of least resistance is to the upside or that support levels are more likely to hold than to break.
Keep your eyes peeled for reversal candlesticks suggesting a bounce off the area of interest, as a continuation of the uptrend could take CHF/JPY up to the swing high or to fresh upside targets at R2 (199.28) then R3 (200.01).
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
