EUR/JPY: Door open for a correction lower – Commerzbank

After failing to extend the rally further north of the 122.60 region, the cross is now expected to face downside pressure, noted Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank.

Key Quotes

“EUR/JPY despite probing the Fibonacci resistance at 122.63 all week we never saw a close above here (the 61.8% retracement of the move down from the April 2019 peak). This coupled with divergence of the daily RSI and a 13 count all points to failure here and a slide lower.”

“The recent low at 120.17 needs to give way for us to refocus attention on the 119.26 mid-November low. Failure here would be considered to be negative and this will target the 115.87 September low (favoured).”

“We will need to see a close 122.88 to negate the negative bias.”