EUR/JPY near-term risks points to the downside – Commerzbank

In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the cross risks further pullbacks.

Key Quotes

“EUR/JPY is in 2 month lows and has eroded the 38.2% retracement of the move from October at 119.70. It recently saw strong rejection from just ahead of the 5 week downtrend at 123.23 and the near term risk remains on the downside. Below 119.70/30 would introduce scope to the base of the cloud at 118.68/35 and the 50% retracement of the same move. This is stronger support and should contain the downside. Intraday rallies are indicated to hold below 121.65/121.10”.

“The top of the range lies circa 123.71/124.08 (15th Dec high). Above 124.08 lies the 124.77 38.2% retracement (of the move down from 2014) and the 125.11 2015-2016 resistance line, is expected to act as critical resistance/break up point”.