EUR/JPY: Resistance at 129.99/130.12 to cap for now – Credit Suisse

The recovery in EUR/JPY from key price/retracement support at 127.93/88 is expected to be capped below 129.99/130.12, economists at Credit Suisse report.

Sideways range to emerge between 127.93/88 and 130.08/12

“EUR/JPY has extended its expected recovery to the back of its broken uptrend from May last year, seen at 129.63 today, with further key resistance seen not far above here at the recent reaction highs and 13-day exponential average at 129.99/130.12. Our bias remains for the recovery to stall here and for the immediate risk to turn back lower in what we look to be a broader sideways range.” 

“Near-term support moves to 128.91, then 128.56/54, below which can see a retest of pivotal support from the 127.97/88 key price lows of August, September and earlier this month and 50% retracement of the rally from last October. Failure to hold here would be seen to mark a large and important top.” 

“Above 130.12 would suggest a more important low has been established to clear the way for further strength with resistance seen next at 130.44, then 130.60.”