EUR/JPY: Downtrend from early June at 131.04/10 to cap the rally – Credit Suisse

EUR/JPY is trading around the 130.30 zone. The downtrend from June, mid-July high and 50% retracement of the June/August fall at 131.04/10 is expected to cap the pair, economists at Credit Suisse report.

Support seen at 130.19/12

“The rally in EUR/JPY looks to be stalling ahead of key resistance from the 50% retracement of the June/August fall, mid-July high and downtrend from early June at 131.04/10. We continue to look for a fresh cap here and for the risk to turn back lower.” 

“Key near-term support remains seen at the lows from the end of last week and 55-day average at 130.19/12, below which can mark a minor top to add weight to our view to see a fall back to the 13-day exponential average at 129.80, then price support at 129.59/58, but with fresh buyers expected here.” 

“Immediate resistance is seen at 130.51, then 130.75. Above 131.10 is needed to see the downtrend break with resistance then seen next at the 61.8% retracement of the fall from June at 131.77.”