EUR/JPY moved sharply higher again on Tuesday, however, only a break above 125.11 would end the corrective risks for the core bull uptrend to resume, in the opinion of the Credit Suisse analyst team. Support stays at 123.03/01, then 122.38/23.
“EUR/JPY rebounded further on Tuesday after essentially holding above the potential uptrend from May earlier in the week. We stay biased towards further ranging here with a mild downside bias whilst below 125.11.”
“An eventual break below the October low at 123.03/01 would reassert the correction and warn of a retest of the 122.38 late September low, then more likely we think key retracement supports seen at 122.27/23 – including the 38.2% retracement of the entire rally from the May low – which we continue to look to remain a stronger floor. A break though would instead raise the prospect of a deeper setback to the ‘neckline’ to the June/July base at 121.35, with scope for the 200-day average at 121.10.”
“Short-term resistance is seen at the 55-day average at 124.73 and then the recent range top at 125.11. We look to hold below here to keep the broader risks lower. Above would signal the core bull uptrend is resuming for a move to 126.46 next.”
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