OANDA:CHFJPY   Swiss Franc / Japanese Yen
Last week's "Chart of the Day" highlighted the JPY futures (6J) as they were breaking down through wedge support. This has taken place, and now intervention talk is louder than ever. As this has happened, the risk for intervention has indeed increased and with the CHFJPY, it may pose a better risk/reward for fresh short positions (or long JPY).

The Swiss National bank (SNB) keeps rates at 1.5%, which is lower than most G10 central banks. And with the Bank of Japan coming out of "negative rates" and eventually raising rates over time, the gap between the SNB and BOJ should tighten. Especially as the SNB is hell bent on bringing down the value of their currency and cutting rates near term.

Technically, the CHFJPY has bounced back to the 61.8% retracement of the February highs to March lows. And this could allow for a good risk/reward entry for new short positions. Clearly, the 200dma has offered support, and a break below the 200dma may allow traders to add to a profitable position on any sustained break below the 200dma which could also suggest a rounded top reversal pattern is taking place longer term. 


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