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CHFJPY Rises 1.25%, Breaches Mid 2015 Highs

FOREX
  • USDJPY in particular has started the week on a firmer note and has breached key near term resistance 125.09, the Mar 28 high. The break higher confirms the end of the recent corrective cycle and more importantly, confirms a resumption of the primary uptrend.
  • Price extended to highs of 125.77, narrowing the gap with 125.86, the Jun 5 2015 high and a major resistance. Above here price may initially target 126.26 -- 3.382 proj of the Dec 3 ‘21 - Jan 4 -24 price swing.
  • Slightly mixed performance for the greenback on Monday with obvious gains against the yen offset by losses against the CHF and the Euro. The USD index resides in positive territory however and is hovering close to recent cycle highs and the best levels since May 2020 around the 100 mark. Latest commentary from the Fed’s Evans suggests the US dollar reflects Fed policy pivot toward neutral.
  • Weakness in Equities weighed on the likes of AUD, NZD and CAD, all falling between 0.2-0.45%.
  • Notable Strength in the Swiss Franc throughout Monday’s US session with EURCHF retreating from 1.0206 morning highs and grinding consistently lower to print a fresh month low below 1.0130.
  • EURCHF tested minor Fibonacci support at 1.0124, with more notable support residing at 0.9972, the March lows.
  • CHF strength comes amid equity weakness and in stark contrast to the resumption of JPY weakness. Exacerbating this divergence was the CHF/JPY cross rising above the mid 2015 highs around 134.50, currently up 1.25%. The next most notable level for the pair is up around 139 which represents the SNB peg removal highs.
  • Focus for tomorrow will be US CPI where the consensus has the headline print surging +1.2% M/M in Feb on sharp rises in energy (~12% M/M) and less so food (1% M/M). That would see year-on-year inflation rise further from 7.9% to 8.4%. UK unemployment as well as German ZEW sentiment data are notable releases during early European trade.
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