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CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex financial instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Market alert: Japanese yen slides against US dollar and Swiss franc

USD/JPY is eyeing off the 24-year high, but obstacles remain in play; CHF/JPY is caught in a range, but momentum might be gaining for a breakout and if the Yen weakening trend continues, how high can USD/JPY and CHF/JPY go?

Source: Bloomberg

USD/JPY

USD/JPY has broken above a descending trend line and is above a series of Simple Moving Averages (SMA). This might suggest that bullish momentum is evolving and a move toward as the 24-year high made last month may unfold.

That peak of 139.39 could offer resistance. Ahead of it, the 78.6% Fibonacci Retracement of the move from 139.39 to 130.39 is at 137.46. That level coincides with a high made near the end of July and might offer resistance.

On the downside, a break point at 135.57 currently has the 34-day SMA nearby and it may provide support. The 55-day SMA also lies just below this level, presently at 135.39.

Further down, a cluster of break points and previous lows in the 131.25 – 131.75 area might provide a support zone.

Source: TradingView

CHF/JPY

CHF/JPY has traded in a 137.17 – 143.75 range for two-months and those levels may provide support and resistance respectively.

At the end of last week, it crossed above the July peak of 143.11 and appears set to test the seven-year high of 143.75 with bullish momentum potentially emerging.

A bullish triple moving average (TMA) formation requires the price to be above the short term Simple Moving Average (SMA), the latter to be above the medium term SMA and the medium term SMA to be above the long term SMA. All SMAs also need to have a positive gradient.

Looking at the 10-, 55- and 100-day SMAs, the criteria for CHF/JPY bullish TMA have been met.

The recent low of 140.40 is just above the 55-day SMA and might provide support.

An ascending trend line extending from the mid-May low of 127.51 and through the low of 137.17 from earlier this month could provide support, currently at 139.60.

Further down, the break point at 137.80 is a possible support level ahead of the 100-day SMA, currently dissecting at 136.94.

Source: TradingView

This information has been prepared by DailyFX, the partner site of IG offering leading forex news and analysis. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.


This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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