EUR/JPY could test 127.27 while capped by 131.96 – Commerzbank

A test of 127.27 remains on the cards as long as the cross trades below 131.96, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“EUR/JPY we highlighted yesterday that the 128.96 low charted on Friday was accompanied by a divergence of the daily RSI and we saw an aggressive rally higher yesterday. We would allow a return visit to the 200 day ma at 131.96. While capped here we are currently unable to rule out a slide to the 127.27 August 2017 low and scope for the 125.58/50% retracement of the move up from 2017(although we think this is now less likely)”.

“Resistance above the 200 day moving average at 131.96 comes in at the 132.43/47 current March high and Fibonacci retracement. If bettered, the January low and February 21 highs at 133.05/09 would be on the cards”.