Daily Asia-London Sessions Watchlist: CHF/JPY

We’ve got Swiss and Japanese economic updates coming soon that may bring some action to the short-term downtrend in CHF/JPY.

Before moving on, ICYMI, today’s Daily U.S. Session Watchlist looked at channel support setup on NZD/JPY, so be sure to check that out to see if there is still a potential play!

Intermarket Update:

Fresh Market Headlines & Economic Data:

S&P 500 rises to new record as Big Tech stocks gain

Fed officials kept a patient tone in terms of tightening monetary policy, minutes show

U.S. job vacancy numbers are jolt for employers

U.S. economic optimism falls despite jobs recovery

WHO urges extreme caution against completely lifting public health measures

UK house prices fell in June as full stamp duty holiday ended, says Halifax

German Industrial Production in May 2021: -0.3% m/m

French Trade Balance: – € 6.6B in May 2021

Italy retail trade slightly increased by 0.2% m/m in May 2021

EU hikes its growth forecasts for the euro area but warns on the delta variant spread

Upcoming Potential Catalysts on the Economic Calendar

Japan Current Account, Bank Lending at 11:50 pm GMT
RBA Governor Lowe speech at 2:30 am GMT (July 8)
Japan Eco Watchers Survey at 5:00 am GMT (July 8)
Swiss Unemployment Rate at 5:45 am GMT (July 8)
Germany Trade Balance at 6:00 am GMT (July 8)

What to Watch: CHF/JPY

On the one-hour chart above of CHF/JPY, we’ve got a semi-descending triangle in the works as the pair makes lower ‘highs’ and finds support around the 119.40 handle. It looks like the bears are having trouble making that break, but we may finally get it with economic updates from both Japan and Switzerland ahead.

For both countries, we’ve got arguably mid-tier economic updates that could bring some short-term volatility to CHF/JPY, but the odds are pretty low unless we get a major surprise from either/both countries.

What may be more of a driver is broad risk sentiment,  which has been more negative than positive lately on COVID-19 Delta variant fears and speculation economic growth may have peaked. If that sentiment continues, then we could see the support area break as the Japanese yen tends to outperform all major currencies in that environment.

So, we’ll be watching all of the economic updates over the course of the next session, and if they generally point to currency weakness ahead, we may see the support on CHF/JPY break.

In that scenario, momentum players may potentially jump in to take CHF/JPY even lower in its current downtrend to potentially retest the major swing low area just below the 119.00 handle.