EUR/JPY to retest September low at 122.38 on a break below 123.03 – Credit Suisse

EUR/JPY spotlight remains on the early October low at 123.03/01, a clear break of which can see a fall back to a cluster of supports at 122.38/23, which includes the September low and 38.2% retracement of the uptrend from May, analysts at Credit Suisse apprise.

Key quotes

“EUR/JPY continues to consolidate around the potential uptrend from May and with the EUR TWI holding a top as looked for, we stay biased lower for a clear break and another test of the early October spike low at 123.03/01.”

“A clear break through 1.23.03/01 would warn of a move back to retest the 122.38 late September low, then more likely we think key retracement supports seen at 122.27/23 – including the 38.2% retracement of the entire rally from the May low – which we continue to look to remain a stronger floor. A break though would instead raise the prospect of a deeper setback to the ‘neckline’ to the June/July base at 121.35, with scope for the 200-day average at 121.08.” 

“Immediate resistance stays at 123.73/78, with a break above 123.94/98 needed to ease the immediate downside bias for a move back to 124.16, then price resistance at 124.47/51.”