The Swiss franc is being hit as the bulls move in on diplomatic hope between NATO and Russia and this has given risk a boost in Asia. In the latest geopolitical developments, Russian media reported that the Ukrainian military forces fired mortars and grenades in four Luhansk People's Republic (LPR) localities. Adding to this, the Organization for Security and Co-operation (OSCE) in Europe recorded multiple shelling incidents along the line of contact in the East Ukraine in the early hours of Thursday.

The contradicting headlines kept investors' on the edge, which was evident from a generally weaker tone around the equity markets.

The Japanese Yen has been gaining strength across the board, taking advantage to the fundamentals which are strengthening the bulls on JPY. From Technical point of view, the flat correction on the daily time frame, along side the failure of Swiss Franc versus Japanese Yen to break the 125.20 daily resistance and  125.42, the weekly higher low resistance, have enabled to favor the dovish projections on CHFJPY. The pair has been stuck in a range bound behavior and has almost proven to be in a consolidation, which emphasizes on CHFJPY going for a ride lower towards our targeted destination. The hawkish momentum is also not supporting the pair to break above the aforementioned resistance and price action levels so we will stick to our bearish entries. On long term trades for holding over the daily time frame, 124.60 support line needs to be broken, this will also provide a closing below the exponential moving averages 50 and 200 on the four hour chart. A slight bullish correction will strengthen the confirmation for taking further bearish entries below the four hour EMA 50 and 200. 

CHFJPY Being Dominated by Fundamentals and Price Action

Feb 18 2022