CHF: The SNB remains uncomfortable with Franc appreciation and continues to remind the market it will need to be careful about any attempts at trying to force an appreciation in the currency. But the SNB will also need to be careful right now, as its strategy to weaken the Franc is facing headwinds from a less certain global outlook. Any signs of sustained risk liquidation, will likely invite a very large wave of demand for the Franc that will put the SNB in the more challenging position of needing to back up its talk with action, that ultimately may not prove to be as effective as it once was, given where we’re at in the monetary policy cycle.
JPY: BOJ Sakurai was out on the wires with dovish comments, which may have been contributing to some of the recent Yen weakness. Still, with the comments mostly consistent with the central bank’s outlook, the moves weren’t going to be all that aggressive. Most of the Yen selling of late has come from the upbeat sentiment around US-China trade and ongoing easy money policy around the globe, which has been helping to bolster investor confidence. Market conditions will thin out for the remainder of the week as the US heads off the desks for the Thanksgiving holiday weekend.
From a technical and trading perspective, the CHFJPY has tested and held the confluent support area at 109 which represents a 38.2% pullback against the October advance and the November monthly pivot. Yesterday’s reversal candle flipped the daily chart bullish as per the near term volume weighted moving average as such i will venture long with a stop below yesterday’s low targeting a move higher to retest the October swing high towards 110.50
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