The sharp sell-off in EUR/JPY stabilised at the 121.37/26 support and analysts at Credit Suisse see the pair returning to its trend higher with a break of the 122.51 level needed to underpin this view.
Key quotes
“Although the market remains below the ‘neckline’ to the medium-term base at 122.52, our bias remains to view this weakness for now as a correction to the aggressive rally seen from early May.”
“Above 122.51/59 is needed to add weight to this view as this would mark a fresh minor base, as well as put the market back above the ‘neckline’ to the larger base to reassert an upward bias for strength back to 123.21/27. Above here is needed to suggest the setback is over and uptrend resumed, with resistance then seen at 124.44, then 125.13/23.”
“Near-term support moves to 121.86, then 121.68. Below 121.26 can see weakness extend further with the 13-day average at 121.06, but with 120.60/56 needing to be removed to end the basing story – the 38.2% retracement of the entire May/June rally.”
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