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EUR/JPY posted a new high of 126.75 last week but this mark was not confirmed by the daily RSI. Notwithstanding, the pair is holding accelerated uptrend at 123.83. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects a small drop but notes that the EUR/JPY pair still targets the 2014-2020 resistance line at 127.60.

Key quotes

“EUR/JPY reached a peak of 126.75 last week; the 2014-2020 resistance line lies at 127.60. A resistance line only connects 2 points and we have not strong bias on whether this will hold or not.” 

“We note that the new highs have not been confirmed by the daily RSI and it is possible that we will see a minor retracement. Dips lower should remain well supported by three-month uptrend at 123.83 and the January high at 122.88. This guards the current July low at 120.28.” 

“Above the 127.60 downtrend we have the 200-month ma at 130.57.”