EURJPY has established a bullish “outside week” and will likely target its next major barrier at around 139.00, according to David Sneddon and his team at Credit Suisse in London.
Sneddon notes that last week ended strongly after having bounced off the rising 55-day moving average to take out the recent 136.64 high and establish a bullish “outside week”, keeping the risk higher for the days and weeks ahead.
He says resistance is now at 137.50 from Friday’s high (2 February) and then more significantly at 139.03/78, which is: i) the August 2015 high, ii) the top of the rising trend channel from August and iii) the potential long-term downtrend from 2008 (see Chart).
Support can be found at 136.69/66 initially and then 136.05/135.97. Sneddon says a break below the latter support would ease upside risk, with support next seen at 135.39 and 134.24.