CHF/JPY Compression Suggests Volatility Is Brewing
Matt Simpson May 17, 2019 9:28 AM
The trade war has seen JPY as the favoured safe-haven currency over the Swiss franc, although prices have managed to retrace from their lows. Given prices are now compressing below key resistance, we’re waiting for signs that bearish momentum is ready to revert to its trend.
Whilst both the Swiss franc and the Japanese yen are safe-haven currencies, it’s interesting to note that the yen has remained the favoured currency as trade wars have developed. This has seen CHF/JPY drop to its lowest level since January’s flash crash last week, and if trade wars are to heat up once more, we could see it return to its trend. So it’s worth noting that China stated they have “little interest” in resuming trade talks with the US, which could see things heat up once more.
Given prices are now compressing below key resistance, we’re waiting for the next bout of volatility to send it lower.
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