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Swiss Franc Technical Analysis – CHF/JPY, GBP/CHF, CAD/CHF. Can Ranges Hold?

Swiss Franc, CHF/JPY, GBP/CHF, CAD/CHF – Talking Points

  • A move lower in CHF/JPY was rejected as it consolidates again
  • GBP/CHF has been quietly trading in the range, perhaps too quiet
  • As CAD/CHF moves up, can it get enough momentum to break higher?

CHF/JPY TECHNICAL ANALYSIS

Recent history illustrates that CHF/JPY has a tendency to trade in a sideways scenario for a period, break to a new level, then establish a new sideways channel. It should be noted though that past performance is not indicative of future results.

The break lower 2 weeks ago was quickly reversed and CHF/JPY moved back inside the previous sideways channel. This might suggest that it established a wider sideways channel, rather than a new one.

As CHF/JPY moved lower, volatilityincreased, as shown by the widening of the Bolling Bands. As it moved back inside the range, volatility started decreasing. Low volatility can be a sign of a range trading environment.

Trading back above the 200-day simple moving average (SMA) may indicate that bearish momentum has abated.

Immediate support and resistance could lie at the bounds of the current range of 117.545 – 121.211.

CHF/JPY CHART

Chart created in TradingView

GBP/CHF TECHNICAL ANALYSIS

Since April, GBP/CHF has been range bound and currently lies near the middle of the sideways channel noted in the chart below. However, the 10-day simple moving average (SMA), 55-day SMA and the 200-day SMA are all converging closer together.

This represents short, medium and long-term momentum indicators nearing the spot price. If the price moves out of the trading range, these momentum indicators may be aligned to suggest a significant move is under way.

Resistance might be found at the previous highs of 1.28195, 1.28567 and 1.30910. Support could be provided at the recent lows of 1.25612 and 1.24731.

GBP/CHF CHART

Chart created in TradingView

CAD/CHF TECHNICAL ANALYSIS

Last month we saw CAD/CHF make a new low at 0.70883, which broke below a previous low and a descending trend line support. However, the market rejected this push lower and a bullish hammer emerged that began this recent run higher.

It remains to be seen if we have merely retreated back inside the sideways channel or if there is enough momentum to break the topside of the range. The 21-day SMA has just nudged above the 200-day SMA, which could be a bullish momentum signal.

A test higher may see resistance at the previous highs of 0.7385 and 0.75287. Support might be found at the pivot point of 0.71739 and the August low of 0.70883.

CAD/CHF CHART

Chart created in TradingView

— Written by Daniel McCarthy, Strategist for DailyFX.com

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