Japanese Yen Range Trades Against the US Dollar but Lifts Against the Swiss Franc.

Japanese Yen, USD/JPY, US Dollar, CHF/JPY, Swiss Franc – Talking Points

• USD/JPY has a 20-year high as the top end of a range
• CHF/JPY has seen momentum slip and might have turned
• With conflicting set-ups, will the Yen resume depreciating?

USD/JPY

USD/JPY has been in a 125.00 – 131.26 range for a month and has broken below the lower bound of an ascending trend channel that started in early March.

The stall in price has seen it cross below several short term simple moving averages (SMA). The gradients of the 5-, 10- and 21-day SMAs have rolled over and are either negative or flat. This may suggest near term momentum has paused.

The medium and longer term 55- and 200-day SMAs remain well below the price with positive gradients which could indicate that underlying bullish momentum remains.

A break-out of the 125.00 – 131.26 range might see momentum follow through in the direction of that move.

The top of this range is a 20-year high and a move above there may bring on a test of the peaks of early 2002. They could present a resistance zone at 135.01 – 135.16.

A break below the bottom end of the range could open up a test of a potential support zone of 125.10 – 125.28. A test in a week or so may see the 55-day SMA also around that level. A break below there might see bullish momentum further questioned.

Chart created in TradingView

CHF/JPY

After making a 7-year high last month, CHF/JPY appears to have lost bullish momentum. The price has crossed below the 10-, 21-, 34- and 55-day simple moving averages (SMA).

The 10-, 21- and 34-day SMAs have rolled over and now have negative gradients. Further suggestive of bearish momentum unfolding has been a series of Death Crosses.

The 10-day SMA has crossed below the 21-, 34- and 55-day SMAs, the latter occurred at the most recent close. The 21-day SMA has also crossed below the 34-day SMA.

This move lower has seen volatility increase as shown by the 21-day simple moving average (SMA) based Bollinger Bands widening again.

The price closed outside the lower band last week and after it closed back inside the band it managed to rally toward resistance at 130.77, which may still offer resistance. The 55-day SMA is also currently dissecting near that level.

On the downside, the recent low at 127.51 and the break point of 127.08 could provide support.

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

To contact Daniel, use the comments section below or @DanMcCathyFX on Twitter