Daily Chart
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Franc lacks recovery potential
The pair is currently following a descending channel pattern on the weekly chart and causes little doubt over a trend continuation in the future, regardless of the dip under the bottom trend-line during the volatile post-Brexit period. Adding strength to our expectation, various period SMAs provide supply side pressure, which limits upside potential for the pair. Targeting approximately 108 Swiss francs per yen, the rate will test the upper trend-line during September, just to dip even further to continue the generally bearish trend. The short-term bullish trend is supported by an ascending channel CHF/JPY has formed on its way towards the senior channel line. If the junior channel is not broken, however, the rate will test the 108 mark in early October, setting 105.26 as the next target over the upcoming days.
4 hour chart
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Short-term bulls dominated by long-term bears
The pair has just overstepped the 20-day upper Bollinger Band in a low volatility setting, implying, but not asserting the pair to be overbought. An opposite verdict by SWFX sentiment index data can be considered more reliable in this specific context. Consistent with our forecast, aggregate technical indicators support an uptrend in short time-frames, but indicate a movement south in general.
In case the channel down pattern is broken after all, the 200-day SMA at 111.15 will be the upward breakout target, while the monthly S2 at 98.70 will be tested if the rate breaks the lower trend-line of the senior channel.
Aggregate technical indicators
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