- In my daily analysis of funding currencies, the first thing I looked to is the Swiss franc and the Japanese yen.
- The Swiss franc has fallen a bit against the Japanese yen in early trading on Friday, and we did see a bit of a continuation into Monday.
- The market looks very likely to eye the ¥171 level for potential support. It’s probably worth noting also that the 200 Day EMA is in the picture as well.
Technical Analysis
Top Forex Brokers
The technical analysis for this CHF/JPY pair is somewhat neutral, but we are most certainly testing the bottom of the range. The question at this point in time has more to do with “who is going to be the major funding currency for the rest of the world?” Ultimately, this is a pair that I watch a lot due to the fact that sooner or later, one of these currencies gets beaten up by others, as interest rates are so low in these countries.
Remember, the Swiss National Bank recently cut interest rates by 50 basis points, and what can be seen as a potential negative and panic move driven by the fact that the European Union is so weak. Remember that Switzerland sends 80% to 85% of its exports into the EU, so as goes the EU, so goes to Switzerland. On the other hand, the Japanese yen is an interesting currency at the moment, because it is still most certainly a funding currency and will be for the foreseeable future, so while it should be week, I use this pair as a gauge as to which currency I’m going to get more momentum from. In other words, as the chart looks like right now you would anticipate that the Swiss franc is weaker than the Japanese yen, so use that information and make moves like buying the USD/CHF instead of the USD/JPY pair. It’s not that the other one can’t work, it’s just that through “triangulation”, it’s obvious that the Swiss franc is weaker.
Begin trading our daily forecasts and analysis. Here is a list of Forex brokers in Japan to work with.