HomeContributorsTechnical AnalysisCHFJPY Confined to Tight Range as Positive Momentum Wanes

CHFJPY Confined to Tight Range as Positive Momentum Wanes

  • CHFJPY consolidates after reaching all-time high
  • Short-term bias looks neutral
  • But downside risk if 50-day SMA doesn’t provide support

CHFJPY has been drifting somewhat lower during September as the year-to-date uptrend lost its steam after reaching an all-time high of 166.57 on August 30. The short-term picture is neutral as the RSI has flatlined just below the 50-mark and the MACD is close to turning zero below its red signal line.

The price action has been stuck in a very narrow range over the past week and is being closed in by the 20-day simple moving average (SMA) to the north and the 50-day SMA to the south. A bearish breakout seems slightly more probable at this stage given the steady decline in positive momentum, potentially creating a battleground in the 164.00 region where the 50-day SMA resides.

A break below the 164.00 floor would take the price inside the Ichimoku cloud, switching the near-time bias to bearish and the medium-term outlook to neutral. Steeper losses would draw attention to the 160.00 handle just above the 100-day SMA and the May top of 155.53.

However, if the bulls fight back and succeed in pushing the price above the 20-day SMA in the 165.20 area, the pair could attempt to surpass its all-time peak of 166.57, resuming its journey into uncharted territory. The 168.00 and 170.00 levels would then become the obvious targets before 261.8% Fibonacci extension of the September 2022-January 2023 downleg at 174.05 comes into scope.

In brief, CHFJPY could remain in a neutral phase for a while longer, but should it drop below the 50-day SMA, the longer-term bullish structure would start to look a bit shaky.

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