CHFJPY Technical Analysis (13th Feb.)

The safe-haven bid of the JPY and the CHF strengthens amid worries that the imposition of reciprocal tariffs by United States (US) President Donald Trump will lead to a global trade war. Trump reiterated reciprocal tariff threats in early North American trading hours through a post on Truth Social. Three great weeks, perhaps the best, but today is the big one: reciprocal tariffs!!! Make America great again!!!,"" Trump said.

Contrary to strength in the JPY and the CHF, the US Dollar (USD) faces selling pressure on optimism over a truce between Russia and Ukraine. Donald Trump announced on Wednesday that leaders of both nations had agreed to peace talks.

The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, has recovered some of its morning gains but is still down 0.15% to nearly 107.80.

Meanwhile, the outlook for the US Dollar remains firm. The hot US Consumer Price Index (CPI) and Producer Price Index (PPI) report for January have boosted expectations that the Federal Reserve (Fed) will keep interest rates in the current range of 4.25%-4.50% for longer.

Fed Chair Jerome Powell said in his two-day testimony before Congress that the central bank can maintain " policy restraint for longer" if the economy remains strong and " inflation does not move toward 2%."

CHFJPY – D1 Timeframe

On the daily timeframe chart of CHFJPY, we see the price approaching the supply zone that broke the structure. The supply zone falls within the 76% Fibonacci retracement area and enjoys confluence with the trendline resistance. The expectation here is a bearish outcome from the retest of the highlighted zone.

CHFJPY – H4 Timeframe

An SBR (sweep-break-retest) pattern is present on the 4-hour timeframe chart, adding further confluence to the rally-base-drop supply zone. Finally, the sweep of liquidity and the Fair Value Gap serve as the final pieces of the bearish puzzle.

Analyst's Expectations: 

Direction: Bearish

Target: 167.062

Invalidation: 171.261

CONCLUSION

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