CHF/JPY Struggles to Break Resistance Around 118.60, What’s Next?

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CHF/JPY Talking Points:

  • CHF/JPY hit a multi-year high around 118.80 in mid-February.
  • The pair has been struggling to reclaim this level and has continually met support around 118.60 recently.
  • The 118.60 level marked a high in both 2017 and 2018.

CHF/JPY Struggles to Break Resistance Around 118.60, What’s Next?

CHF/JPY hit its highest level since early 2016 in February, rising to briefly trade around the 118.80 level. The pair met resistance around this multi-year high and grinded back lower, falling to support around the 116.00 level.

Another attempt on 118.00 in mid-March met a similar fate, sliding back to the 116.00 level. From this March 23rd low, the pair steadily strengthened through mid-April, rising as high as 118.70 before meeting resistance and turning slightly lower. Over the following week, price action whipsawed between 118.60 and 117.70, with attempts higher quickly rejected.

The pair slipped to a fresh two week low on April 21st, falling to 117.60. While further attempts at 118.60 may be in store for the near future, the longer-term outlook for the pair is looking mixed which lends itself to range trading strategies.

Swiss Franc/Japanese Yen – 2 Hour Time Frame (February – April 2021)

Chart created by Izaac Brook, Source: TradingView

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Swiss Franc/Japanese Yen – 1 Day Time Frame (2016 – 2021)

CHF/JPY Struggles to Break Resistance Around 118.60, What’s Next?

Chart created by Izaac Brook, Source: TradingView

In a longer-term perspective, the 118.50 level has marked a key high point in the range for the pair established in 2016. The yearly highs in 2017 and 2018 both occurred around the 118.50 level, and were both followed by, on average, a 400 pip drop over the following month.

While CHF/JPY has trended higher since the March 2020 lows around 109.00, there may not be much remaining in the way of further strength. In 2021, the pair has mainly consolidated between the 116.00 and the 118.00 level, with a failed attempt at breaking to new multi-year highs in February. With another attempt at the 118.50 level rejected in mid-April, further downside may be lurking.

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— written by Izaac Brook, DailyFX Research Intern

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