In EUR/JPY, Commerzbank notes that as it came under pressure yesterday and focus has shifted to the 200 day ma at 138.27 which is now exposed.
“It should be noted that we suspect that the pattern developing on the chart is a potential bear flag – this following the break down from a triangle suggests a fast sell off once a close below the 200 day ma has been seen,” CB argues.
“Initial resistance is 139.36, 27 May high. Our initial downside target is the 200 day ma and recent low at 138.27/15 en route to the 136.25 2014 low,” CB projects.
“Although it should be noted that the triangle measures to approximately 130, which is achievable by the end of the year,” CB adds.
In line with this view, CB maintains a short EUR/JPY from 139.30, with a stop at revised stop at 141, and a target at 130.20.
