EUR/USD: Breakdown Point; USD/JPY: RSI Divergence - Credit Suisse
EUR/USD bounced back as of late as it consolidated recent losses. However, we expect the 1.0506/31 “breakdown point” to cap to keep the trend directly lower. Removal of the 1.0352 recent low can see further downside to test 1.0342/36 next.
Our core target remains in the broad 1.0109/.9921 zone – the long-term uptrend from 1985 and two key retracement supports. However, although we would expect an initial hold to be seen here, we continue to look for a break in due course for a move to .9625.
Resistance moves to the recent breakdown area at 1.0506/31 which is expected to attract renewed selling.
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*CS maintains a short EUR/USD position from 1.0670.
USDJPY has settled into a high level range this week capped just below the downtrend from August last year and recent high at 118.59/66. With RSI momentum still showing a divergence we must allow for this level to cap further.
However, we look for a break above here in due course to aim at 120.00/12 next – the 78.6% retracement of the 2015/2016 bear trend.
Support moves to 116.99/98 then 116.55, then 116.28/13, which we ideally look to try and hold and turn prices higher again. Below can see a deeper decline to 115.47.
*CS maintains a limit order to long USD/JPY at 116.45.
