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With nothing on tap for the Swiss economy, traders took to the Japanese yen as news hit the wires of Russian central bank diversification.  Announced in the overnight the Russian central banks first deputy chairman, Alexei Ulyukayev, announced proposed plans of diversifying reserves into Japanese yen positions.  Already expanded by 50 percent this year to $267.9 billion on higher crude oil prices, the addition of the yen would surely boost the demand for the underlying currency against other majors.  As of September 13^th, the central banks reserves are held in 60 percent US dollars, 33 percent euros and 7 percent in British pounds.  Now although the move would bolster more Japanese yen on a diversification role, bigger speculation is seeing the possible windfall as subsequent central banks will likely follow suit and diversify.  The sudden jump in demand will likely spur further speculative liquidation, boosting the case for yen longs.  The notion added to Swiss weakness ahead of the German ZEW survey and may likely continue as the market continues to contemplate the potential for global portfolio readjustment.

Finding a supported bottom, the CHFJPY looks ripe for a temporary pullback on the two weeks of declines previously seen.  Now consolidating on the 93.50 figure, bulls are eyeing the 94.00 handle with Stochastic confirming the bidding sentiment.  The boost would meet the ceiling that currently coincides with the 94.04 resistance figure (38.2 percent fib level from the 10/03-10/13 bear move).  However, should the current floor remain unable to hold, bears are likely to eye the 93.00 figure as the next common barrier.

CADJPY

Canadian dollar strength was not seen on the day despite crude oil contracts rebounding from last weeks dour attitude to settle slightly higher at $59.90, just below the benchmark $60 figure.  With traders still seeing limited upside risk from the recently instituted OPEC production cuts, previous short positions were pared back as traders took short term profits.  However, with the fall season upon us, the contract may receive some short term bidding instead, which is usually the case this time of year.  The Canadian dollar is additionally depressed, on the bullish yen news earlier this morning, despite the equity benchmark closing higher throughout the North American session, rising 1.2 percent.  The finish puts some pressure going into this weeks schedule, although light, with speculation looking for any sign of a possible hawkish bias in the near term, serving more than enough to boost the underlying.

Hitting midrange support, the CADJPY currency cross has plenty of bidding heading into the Asian session.  Declining to just above the pivotal 104.50 figure, Stochastic is signaling a rise in the short term with the price action visual resembling pure consolidation.  Coincidentally, the current support is in line with 104.55 (S1 Daily Pivot Support), a formidable barrier.   A break here would ensure a downward spiral to 104.12 with bids likely to take the price higher.  Conversely to the upside, the 104.78 (S2 Pivot) will have to be broken on the 60-minute in order to spark any bullish fever.

NZDJPY

Traders disregarded the carry notion and began shorting the cross in the North American session following the bullish news of the Russian diversification.  Coincidentally, further supporting yen positioning was news that Chinese officials are siding with a more flexible domestic currency in the short term.  Yi Gang, assistant governor to the Peoples Bank of China stated to Xinhua News Agency that the country will let the yuan rise gradually as reforms instituted last year hasnt affected exports.  Although not a blow indication, it does reflect a change of thought as officials are now considering the move even more.  Lending competition to the Japanese exporters, the news comes as a positive for the yen, and boosting plenty of downside for the Cross.

Although forming a double bottom, more downside may be in the cards for the NZDJPY.  Approaching key resistance, one that coincides with topside trendlines of the channel in the 60-minute chart, the price action will likely be in line with the daily view.  In the daily chart, a death cross has formed n the longer term, which is likely to filter through to the shorter term 60-minute.  As a result, bears are looking to the 77.87 (S3 Daily Pivot) for barriers to the downside, likely to make quick work of the 78.20.  Conversely, upside potential looks to be eyeing the simple 79.00 handle (R1 Daily Pivot).