Last week’s CHFJPY decline took the market through the spot moving average and the RSI average. Although early follow through lows this week have not been maintained, our technical signals indicate scope for the downside to expand in the coming weeks.
The equivalent Bullish signals were posted in April. Here the RSI golden cross confirmed marginally later and the positive tone for CHFJPY was emphasised by a move above the top of the Ichimoku Cloud pattern. The cross rose another 4 1/2 big figures after the confirmation to reach a 17-month peak in July.
Currently, CHFJPY is comfortably above the Ichimoku Cloud and so, despite the bearish crosses of the moving averages, caution needs to be applied. However, we’re watching June’s 112.50 low with a break of that point likely to add to negative CHFJPY momentum – targeting 110.13 and 109.66, the bottom of the Cloud pattern.
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