EUR/JPY at more than 3-year high
EUR/JPY rose today above 133.00, to the highest level since Jan. 2010. Resistance is at 134.50, 135.00 (bullish flag target). There’s some diversion on MACD (daily, H4), so there’s a significant risk of pullback down and some more consolidation. Support lies at 132.00 (50% Fibo of the decline from 2008 to 2012), 131.77 (100-month MA) and 131.00.
Goldman Sachs expects EUR/JPY to climb to 140.00 after a pause. In their view, the markets are still in the process of reprising the Bank of Japan’s policy regime. Euro’s recent pause in advance again yen was caused by the sharp increase in US Treasury yields. As most of this move in the Treasury yields is already made, Goldman thinks that EUR/JPY is also set to strengthen in the coming weeks.
Chart. Daily EUR/JPY