EUR/JPY - Pattern is increasingly looking like a top - Commerzbank
Karen Jones, Head of FICC Technical Analysis at Commerzbank, takes note of the aggressive drop in the EUR/GBP cross and the resulting topping pattern on the charts.
This is the third time that the market has failed at 134.58 and this is viewed very negatively. Ideally, we would like to see a close below the base of the cloud at 130.98 to confirm losses to 128.50 and the 127.57 August low.
Where are we wrong near term? Above 134.58 November 2015 high. Above here would target the 2008-2017 resistance line at 140.72/141.00. The market is now bid above the 131.39 recent low and the base of the cloud at 130.98.
Short-Term Trend (1-3 weeks): Increasingly looks like a potential top.
Long-term trend (1-3 months): Neutral.