We’ve got Swiss and Japanese economic updates coming soon that may bring some action to the short-term downtrend in CHF/JPY.
Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at channel support setup on NZD/JPY, so be sure to check that out to see if there is still a potential play!
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Fresh Market Headlines & Economic Data:
Upcoming Potential Catalysts on the Economic Calendar
Japan Current Account, Bank Lending at 11:50 pm GMT
RBA Governor Lowe speech at 2:30 am GMT (July 8)
Japan Eco Watchers Survey at 5:00 am GMT (July 8)
Swiss Unemployment Rate at 5:45 am GMT (July 8)
Germany Trade Balance at 6:00 am GMT (July 8)
What to Watch: CHF/JPY
On the one-hour chart above of CHF/JPY, we’ve got a semi-descending triangle in the works as the pair makes lower ‘highs’ and finds support around the 119.40 handle. It looks like the bears are having trouble making that break, but we may finally get it with economic updates from both Japan and Switzerland ahead.
For both countries, we’ve got arguably mid-tier economic updates that could bring some short-term volatility to CHF/JPY, but the odds are pretty low unless we get a major surprise from either/both countries.
What may be more of a driver is broad risk sentiment, which has been more negative than positive lately on COVID-19 Delta variant fears and speculation economic growth may have peaked. If that sentiment continues, then we could see the support area break as the Japanese yen tends to outperform all major currencies in that environment.
So, we’ll be watching all of the economic updates over the course of the next session, and if they generally point to currency weakness ahead, we may see the support on CHF/JPY break.
In that scenario, momentum players may potentially jump in to take CHF/JPY even lower in its current downtrend to potentially retest the major swing low area just below the 119.00 handle.