EUR/JPY: Scope for a deeper recovery to the 55-DMA at 129.81/85 – Credit Suisse

EUR/JPY has surged dramatically higher after holding support from the 50% retracement of the entire 2020/2021 uptrend at 124.26. Economists at Credit Suisse expect the pair to extend its strong recovery to the 61.8% retracement of the February/March collapse and 55-day moving average (DMA) at 129.81/85.

Initial support seen at 126.85/74 

“We look for the recovery to extend further yet with resistance seen next at the 50% retracement of the February/March collapse at 128.78. Whilst we look for this to cap at first, above in due course should see what we look to be tougher resistance at the 61.8% retracement and 55-DMA at 129.81/85. With the 200-DMA not far above at 130.11, we look for a better cap here. 

“Support is seen at 127.38 initially, with 126.85/74 ideally holding to keep the immediate risk higher. Below 126.00 though is needed to see the risk quickly turn lower again for a retest of 124.40/26.”