EUR/JPY to move back to the 2020 lows and channel support at 127.51/21 – Credit Suisse

EUR/JPY has completed another bearish “outside day”. Economists at Credit Suisse stay biased lower for 128.29/19, then the 2021 low and major channel support at 127.51/21.

Resistance is seen at 130.10

“EUR/JPY has seen yet another large bearish ‘outside day’ to further reinforce its near-term top and prior “reversal day” and we look for this to keep the risk directly lower.” 

“Support is seen initially at 128.56/55 ahead of the 78.6% retracement of the December/January rally and potential trend support at 128.29/19. Whilst we would look for this to hold at first, the broader risk is seen lower for an eventual break and a fresh test of what we see as more important support at the 2021 low and lower end of the medium-term channel at 127.51/21.” 

“Resistance is seen at 129.39 initially, then 129.52, with the immediate risk seen staying lower whilst below 130.10. Above can see a recovery back to 130.47/57, but with fresh sellers expected here.”