USD/JPY
Our 115.60/116.15 target has been achieved, which we expect to cap initially. USDJPY has extended its rally to test our target at 115.60/116.15 – the 61.8% retracement of the 2015/16 fall and the August 2015 low.
We ideally look this to cap first for an initial retracement lower. Support moves to 114.62/57 initially, below which can see a move back to 114.29, with a break here targeting 113.94/70 ahead of the rising 13-day average at 113.18/13. Removal of 112.88 is needed to set
a small top. A direct break above 116.15 can aim at “neckline” resistance at 117.32 next, where we would expect fresh sellers to show. Should strength extend, we would target the potential downtrend at 118.70 next.
Strategy: Flat. Buy at 113.45, stop below 112.88 for 115.60
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EUR/JPY
EURJPY has extended its recovery from the rising 13-day average, now at 120.92, and attention turns back to the 123.36 recent high. Beyond here can see the trend turn higher again for price resistance at 124.20/66 next. We would expect an initial cap at this level, and a retracement back from lower. A direct break above 124.66 can target the 50% retracement of the June 2015/16 fall at 125.35.
Support moves to 121.92/89 initially, then 121.43, with 120.92/90 ideally holding to keep the immediate risks higher.
Strategy: Flat, try a long at 121.60, stop below 120.90 for 124.18.
