EUR/JPY to set an important base above 130.75 for a sustained race higher – Credit Suisse

EUR/JPY has surged higher as the yen itself weakens sharply on a broad basis. The pair should see an important base established above 130.75 with resistance then seen at 131.04/10 initially and with its “measured base objective” seen at 133.43, economists at Credit Suisse report.

EUR/JPY to confirm a base above 130.75 with resistance seen at 131.04/10

“The spotlight turns to key resistance from the September highs and ‘neckline’ at 130.48/75. With USD/JPY already seen establishing a major base, we look for this to be cleared also to see an important base established here as well to mark the beginning of a more sustained move higher.”

“We would see initial resistance at the 50% retracement of the fall from June and mid-July reaction high at 131.04/10, ahead of the 61.8% retracement at 131.77. The ‘measured base objective’ though would be seen higher at 133.43.” 

“Support moves to 130.30 initially, then 129.98, with 129.51 now ideally holding to keep the immediate risk higher.”