EUR/JPY strength has quickly faded and the sharp sell-off yesterday quickly turns the spotlight back to the twin 124.44 lows. Below this latter level the pair would mark a top with support then seen at 124.11, then 123.19. On the flip side, resistance is seen at 125.28/32, the Credit Suisse analyst team reports.
“EUR/JPY strength has quickly faded and the sharp sell-off yesterday quickly turns the spotlight back to the twin 124.44 lows of late August and earlier this month. Beneath here would see a top established with support seen initially at the 55-day average at 124.28, then 124.11 – the 38.2% retracement of the rally from late June. We would like to see this latter level removed to confirm the top and more important turn lower with support then seen next at the 50% retracement at 123.19, ahead of price support at 122.84 and then more importantly at the 38.2% retracement of the entire rally from May at 122.27/23, with the “measured top objective” seen below here at 121.80.
“Resistance is seen at 125.08 initially, with 125.28/32 now ideally capping to keep the immediate risk lower. Above would reinforce the existing sideways range with resistance next at 125.78.”
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