EUR/JPY has recovered sharply from key support at 124.50/33 as expected and analysts at Credit Suisse continue to look for signs of a base here for a resumption of the uptrend with resistance seen at 126.10.
Key quotes
“EUR/JPY has extended its defence of support at 124.50/33 – the early August low and uptrend from May – and we remain of the view weakness has been a corrective pullback only ahead of the core uptrend extending.”
“A sustained move above 126.10 is still needed though to add weight to this view, as well as curtail thoughts of a potential “head & shoulders” top, for a fresh look at the 126.76/84 highs, beyond which in due course can see the 127.52/57 high of 2019 and long -term downtrend from 2014.”
“Support at 125.35 now ideally holds to keep the immediate risk higher. Below can see a fall back to 124.90, but only below 124.50/33 would see the completion of a top for a more concerted corrective phase, with support seen next at trend support from early June at 124.19, then 123.91/84 – the 38.2% retracement of the rally from late June and 23.6% retracement of the entire rally from the May low.”
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