After EURJPY’s accelerated recovery at the end of last week, David Sneddon and his team at Credit Suisse ask whether the currency pair will continue higher.
Sneddon says EURJPY is fast approaching key resistance at the top of its December 2016 to January 2017 trading range, between 123.46 and 124.10 (see Chart), where he expects strength to be capped, at least for the time being. Should it break above, Sneddon thinks the target will be the 50% retracement of the 2015 to 2016 decline at 125.31.
Below, Sneddon says there is support at 122.64, then 122.15 with a break of 121.90 needed to retest the 55-day moving average at around 121.20.
Despite the cap at 123.46/124.10, overall Sneddon’s view remains bullish on all short- to medium-term time frames (1 day, 1 week and 1 month).