FXStreet reports that analysts at Credit Suisse note that EUR/JPY has removed support at 120.60 on a closing basis and with daily MACD momentum having turned lower, the risk is seen lower with next key support seen at the 200-day average at 119.55.

“EUR/JPY has finally seen a decisive break of key support at 120.60/56 on a closing basis – the 38.2% retracement of the entire May/June rally – and this has seen a small bearish continuation pattern complete and with daily MACD momentum having turned lower, further weakness is expected.” 

“Support is seen at 120.04 initially ahead of 119.82 and then 119.55/41 – the 55-day average and 50% retracement of the rally from May – with a fresh hold here expected. Should weakness directly extend this can expose the 55 -day average and 61.8% retracement at 118.22/14, potentially the top of the April/May base at 117.78.” 

“Resistance moves to 120.85 initially, with a break above 121.24 needed to ease the immediate downside bias. Beyond 122.13 though is needed to suggest the correction is over and broader uptrend resumed, with resistance next at 122.51/62.”