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EUR/JPY remains on the back foot while trading around 125.50, down 0.1% on a day. Therefore, the uptrend at 125.61 is being eroded and Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, is looking to the downside, specifically to the 124.34 mark.

Key quotes

“EUR/JPY is eroding trend line support at 125.61 but only just! It is also failing at the 2014-2020 resistance line at 127.38.”

“The recent high at 127.07 has been accompanied by a divergence of the daily RSI and our attention has reverted to the downside and we would allow for losses to the 124.34 10th August low.” 

“Below 124.34 would target the January high at 122.88. The latter guards the July low at 120.28.”