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EUR/JPY has successfully held key support from its late August low at 124.44 to avoid a top, for now at least, but with resistance at 126.04/08 needed to be cleared to see the core uptrend resume, per Credit Suisse.

Key quotes

“EUR/JPY has successfully defended key support from its late August low at 124.44 and although the subsequent strong recovery did not quite complete a bullish ‘reversal day’, the market came close to doing so.”

“Above 125.65/71 is needed to see the immediate risk stay higher with key resistance still seen at 126.04/08. Above here is needed to suggest the threat of a top has indeed been curtailed, reasserting the underlying uptrend for strength back to the 127.08 recent high, then the 2019 high ad long-term downtrend at 127.41/52.”

“Below 125.29 would ease the immediate upside bias, but with a move below 124.92 needed to warn of a retest of 124.44. Beneath here would see a top established to mark a more important turn lower with support seen next at 124.11 – the 38.2% retracement of the rally from late June. Whilst we would look for this to hold at first, below can see support at 123.19.”