CHF/JPY Targets as Buyers Rebound Mid-Bollinger Bands
Market Overview
As geopolitical shifts in the Middle East persist, investors continue to favor safe-haven currencies like the Swiss franc. This sentiment has strengthened demand for the franc, particularly as political unrest in South Korea and weaker-than-expected economic data from China weigh on Asian currencies. The Japanese yen, traditionally viewed as a rival safe-haven to the franc, has also stagnated due to these dynamics, further bolstering CHF/JPY gains.
Technical Analysis
On the four-hour chart, CHF/JPY exhibits a clear bullish trajectory, with the formation of higher highs and higher lows confirming a reversal of the prior downtrend. This bullish confirmation comes as the pair successfully broke above the 34-period and 100-period weighted moving averages. Notably, the price is testing the critical resistance at the 61.8% Fibonacci retracement level (171.253), signaling growing upward momentum.
Buyers have re-entered the market aggressively near the recent low at 170.249, effectively halting selling pressure and reinforcing demand. This move is further validated by positive momentum signals. The Relative Strength Index (RSI) has risen to 57.27, indicating strengthening bullish momentum without yet entering overbought territory. Similarly, the Moving Average Convergence Divergence (MACD) has crossed into positive territory, with its lines diverging upward, signaling accelerating upward momentum.
The immediate upside targets include 171.874, followed by the 127.2% Fibonacci extension at 172.316 and the 161.8% extension at 172.878. Breaking above these levels would pave the way for potential long-term gains, supported by sustained bullish sentiment and technical confirmation.
Maintaining the current bullish trend will require the price to remain above the 61.8% Fibonacci level at 171.253 while continuing to form higher highs and higher lows.
Alternative Scenario
However, failure to sustain this level could lead to a retracement toward the key support at 170.249, potentially challenging the overall bullish structure.
Key Levels
- Resistance Levels: 171.253, 171.874, 172.316, 172.878
- Support Levels: 170.249
Key Events to Watch
Switzerland’s consumer confidence report presented mixed results, with a decline from the previous period but a better-than-expected outcome compared to forecasts. Meanwhile, market focus has shifted to the Swiss National Bank’s (SNB) policy meeting on Thursday. Investors anticipate another rate cut, which could impact franc dynamics. Any unexpected signals from the SNB could influence CHF/JPY’s direction significantly.
Conclusion
CHF/JPY remains in a bullish setup, with immediate targets at 171.874 and higher levels contingent on breaking 171.253. Failure to maintain upward momentum could lead to a retracement toward key support at 170.249, challenging the current bullish outlook.
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