Recent turmoil has naturally seen safe havens such as Gold, CHF and JPY benefit. However it is interesting to note that JPY has had the upper hand over CHF since peak in June 2015, as demonstrated in the chart above. Even more interesting is the fact we now rest precariously above 124.0 which provides several technical levels of support.
The question now is if we are going to see JPY remain as the safety favourite to see CHFJPY break this key level of support, or if we are going to see a turnaround of fortunes, and CHFJPY remain above 124 to start a bullish leg.
Yesterday saw an intraday break below 124 to show that bears do still have the upper hand. A break below 123.70 (yesterday's low) could see CHFJPY make a run for 122, with a longer-term target being the confluence of support around 120 (round number, 161.8% projection, MS2 and March lows).
If we can remain above 124 then 126 becomes the initial bullish target. If there is anything that makes me suspect we may hold above 12 this week it is that, due to Chinese markets now closed until Monday, we could see JPY outflows (as China was the main cause of JPY inflows). This should help support CHFJPY initially, and a decent jobs print on Friday from US could also see a stronger USDJPY and CHFJPY.
Either way, 124 is the level to watch to asses which direction to trade CHFJPY, or select relevant CHF and JPY crosses.
CHFJPY: The safe haven battle for supremecy
124 is the key level to watch for CHFJPY as it is a pivotal level for bulls and bears, to help choose a directional trade or select relevant CHF and JPY crosses.