CHFJPY has lost its positive momentum after the bounce off the six-month high of 115.30 on August 30. According to the RSI, the market could maintain negative momentum in the short-term as the indicator is negatively sloped above its neutral threshold of 50, though the fast Stochastics suggest that the market is moving towards the oversold territory and therefore some weakness is possible; the blue %K line is fluctuating slightly below the red %D line.
On the downside, the price could attempt to touch the 20-day simple moving average (SMA), which coincides with the 113.20 support level. Further losses could also endorse the sharp retracement of the previous couple of weeks upward rally, hitting the 40-SMA near 112.46 at the time of writing. Should traders continue to sell the pair the 110.75 support could provide a significant obstacle.
However, in the case of a continuation of the bullish run and a climb above 115.30 could extend gains until the seven-month high of 118.55, reached on February 2.
Turning to the medium-term trading, the outlook is neutral over the last 22-month and only a decisive close above 118.55 could resume the bullish picture. On the other hand, a significant decline below May’s trough of 108.50 could shift the outlook to bearish.
