CHFJPY Drops on Thursday but the Main Sentiment Remains Positive

Recent moves on the yen are definitely eye-catching and bring interesting trading occasions. In today’s analysis, we have the yen paired with another safe haven currency – The Swiss franc. Yes, the same one that recently jumped out of negative interest rates territory.

CHFJPY was heavily affected by the FX intervention in Japan (orange). After the intervention, the price went slightly higher and then closed itself for a few days inside of a rectangle (grey). Yesterday, this sideways move finished, with the price breaking the resistance (blue) and moving upside. CHFJPY reached lows from the middle of September (yellow) and that’s where the bullish correction stopped.

What we’re witnessing now is a bearish correction again but our sentiment on this instrument is rather positive. Why?

Well, this drop is rather a normal price action movement of a broken resistance being tested as the closest support (blue). Apart from that we have three more key supports below. Red and green mid-term up trendlines and the black, long-term one. As long as the price stays above those three, the sentiment is definitely positive.