EUR/JPY tests the five-month support line at 123.39 – Commerzbank

EUR/JPY sells off to its five month uptrend at 123.39 which is expected to hold initially. A break below here, would open the path to the September low of 122.38 and potentially to the 200-day ma at 121.08, Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, briefs.

Key quotes

“EUR/JPY is under pressure following the recent failure at the 200-week ma at 125.21. The market has sold off back to the up trend at 123.39, which we would allow to hold the initial test. Failure here will target 122.38, the September low and there is scope for the 200-day ma at 121.08.” 

“Should a close above the 61.8% retracement at 125.29 be seen this will reintroduce the idea of challenging the 2014-2020 resistance line at 127.00, which we again would allow to hold.”