EUR/JPY to simmer an attack to the eight-month downtrend channel at 132.92/98 – Credit Suisse

EUR/JPY extends its high-level consolidation following the rally to the 78.6% retracement of the Q4 2021 fall at 132.18. This stays seen as a temporary breather ahead of further strength to the top of the eight-month downtrend channel from June last year at 132.92/98, in the view of analysts at Credit Suisse.

Support is seen at 130.50

“EUR/JPY is seeing a high-level pause following its strong move higher. This stays seen as a temporary pause only following the break above its downtrend from last October and more importantly its January highs. 

“We continue to look for a clear break above 132.18 in due course to see strength extend to 132.58 next ahead of what we expect to be tougher resistance at the top of the eight-month downtrend channel from June last year at 132.92/98. We expect this to remain a tougher barrier.” 

“Support stays seen at 131.47/44 initially, then 131.21 ahead of the back of the broken uptrend at 130.83. An immediate upside bias though should be maintained whilst above the recent reaction low and 200-day average at 130.50.”