Whilst the yen has enjoyed its safe haven status recently, the chances are this is merely temporary. So I am seeking clues for the pending weakness of the yen. Price action on the CHF/JPY may well provide the clues I seek.
CHF/JPY WEEKLY: Losing bearish momentum
Below we can clearly the primary trend is bullish and are seemingly trading in a bullish channel. Take note however the channel subject to change, and they needn't be perfect anyway - they merely help provide structure to the analysis.
Since the 119.20 swing high a Dark Cloud cover reversal has formed which warned of the subsequent decline - but we can now see the decline is losing momentum, last week produced a Rikshaw Man Doji and we continue to trade within last week's range.
Whilst this does not generate a buy signal within itself it does point towards the potential for a pending turning point in the week/s ahead.
CHF/JPY Weekly Chart" title="CHF/JPY Weekly Chart" width="474" height="242">
CHF/JPY DAILY: Holding above bed of support
The support is made up of 50 day eMA, swing low, weekly pivot and Monthly S1. As we are approaching the end of the month these pivots will change, however a break above the 115.62 swing high could be taken as a bullish sign and an assumed continuation of the uptrend.
IN the event we see a downside break we have fewer obvious levels of support to choose from (so perhaps refer to next month's pivot levels) but we do have the lower channel line.
Either case the objective here is to identify a turning point in JPY so a bullish signal here could be compared with EURJPY, USDJPY etc. so gauge confidence in the following move. That is the more currencies we see appreciating against JPY the more confidence we have of a trend continuation.
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