CHFJPY has been trading within a well-defined range between the 198.500 support floor and the 204.00 major psychological resistance ceiling, and the pair is currently testing the lower end of this range around the 201.00 area after a sharp pullback from the recent highs.
A bounce from this zone could put the swing high back in play, while a break below the range floor could set off a more extended selloff.
The 100 SMA (blue) has been acting as dynamic support over recent months and is now converging with price near the 201.00 area, which could be enough to attract fresh buying interest. However, the 200 SMA (red) appears to be sloping lower and diverging from the 100 SMA, suggesting that the broader trend is losing bullish momentum.
If the 100 SMA gives way, a drop to the range lows near 198.50 could follow, and a confirmed break below that floor would open the door for a measured move selloff equal to the width of the range, potentially targeting the 193.00 major psychological region.
On the oscillators, stochastic has plunged sharply into the oversold area, reflecting a rapid surge in selling pressure. The oscillator is approaching levels where a reversal could be triggered, so turning higher from here would signal that buyers are starting to step back in.
RSI, however, is still sliding within its lower range without a clear upturn yet, suggesting that sellers still have the upper hand for now. The oscillator has some room to slide further before reaching deeper oversold territory, so a bit more downside pressure cannot be ruled out.
A less hawkish tone from the SNB or a more aggressive BOJ stance could keep the yen bid and add pressure on the pair heading into the next support test. Reports that BOJ Governor Ueda appears to be complicating the yen outlook while traders worry that fewer hawks might be present in the next central bank meeting.
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