Karen Jones, Head of FICC Technical Analysis at Commerzbank, suggested the cross could weaken to the 125.75 level on a close below the 128.00 handle.
Key Quotes
“EUR/JPY has been rejected by the 55 day ma at 130.42 and 2018 downtrend line at 130.80. It is on the defensive and an erosion of 128.00 on a closing basis should be enough to trigger a slide back to 125.75, the last defence for the 124.62 recent low”.
“Below 124.62 there is scope for a slide to the 124.08 December 2016 high. Between here and the 50% retracement at 123.40 we expect to see some profit taking. Below here would target 120.10/00″.
“Near term should a break above the downtrend be seen, we would be unable to rule out scope for further gains to the 131.34/48 May highs and possibly even for the 133.48 April peak”.
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