EUR/JPY to extend its race higher on a break above 130.65/75 – Credit Suisse

EUR/JPY extends its strong defense of key support at 127.93/88. Analysts at Credit Suisse look for a retest of the early September highs at 130.65/75, above which would now see a bullish “double bottom” base complete.

Important basing process underway

“With the market already pushing above the 55-day and 200-day averages, we believe a more important basing process is underway, which would also be consistent with the sharp rise higher in bund yields we are also witnessing.”

“We stay biased higher with resistance seen next at 130.20/30, then more importantly at the 130.65/75 early September highs.” 

“Above the 130.65/75 early September highs would now see a bullish ‘double bottom’ base established to confirm a more important turn higher, with resistance then seen next at 131.04/10 ahead of 131.77 and eventually the ‘measured base objective’ at 133.57.” 

“Support moves to 129.45 initially, then 129.51, with 128.78/58 now ideally holding to keep the immediate risk higher.”