CHF/JPY Sellers Eye Downtrend Amid Waning Swiss Franc Appeal

Market Overview

On Thursday, the CHF/JPY pair is showing early signs of a potential downtrend as the Swiss franc loses momentum following a one-month rally. Both Swiss and Japanese markets remain closed for bank holidays, limiting liquidity in the pair. Meanwhile, the Japanese yen remains stable, while the US dollar dominates as the best-performing currency among the G10, bolstered by weaker economic data from Europe and the UK.

Technical Analysis

The CHF/JPY pair has entered a corrective phase on the 4-hour chart after breaking below its upward trendline. This move signals a potential shift in momentum as sellers gain control of the market. The recent breach of the last swing low at 172.737 has emboldened bearish sentiment, positioning the pair for further declines toward 172.428. If the selling momentum persists, the subsequent targets lie at 172.034 and 171.600.

Momentum indicators validate the bearish scenario. The RSI shows increased selling pressure, while the MACD has crossed into negative territory, reinforcing the downside bias. Additionally, the pair is trading below key moving averages, signaling a change in market sentiment.

Conversely, a break above 173.874 would invalidate the bearish outlook, allowing buyers to regain control and potentially extend the prior uptrend.

Key Levels

• Resistance Levels: 172.737, 173.171, 173.874
• Support Levels: 172.428, 172.034, 171.600

Key Events to Watch

Although market activity is subdued due to the Japanese holiday, investors are awaiting Switzerland’s manufacturing PMI, set to be released later in the week. The previous reading of 48.4 fell short of expectations, and forecasts suggest continued weakness. A lower-than-expected PMI could further pressure the Swiss franc, adding to CHF/JPY’s bearish trajectory.

Conclusion

CHF/JPY has shifted into a corrective phase, with key support at 172.428 marking the next target for sellers. Resistance at 173.874 remains the pivotal level for a potential reversal into bullish territory. Economic data from Switzerland and broader G10 dynamics will likely influence near-term price action.

• share