The euro and the yen both both managed to recover nicely at the wake of the new week, recovering from the NFP blow earlier.
Is it a change of trend or just a classic retracement? Here are the thoughts of the team at Credit Suisse:
Here is their view, courtesy of eFXnews:
EUR/USD ended last week again in retreat before bouncing slightly at the opening of this week but the spotlight is still on a move towards the bottom end of the medium-term range, starting at 1.2227, notes Credit Suisse.
“We continue to expect a bounce here. However, if directly removed, this would expose the 1.2042 low of 2012 where we would expect a renewed basing effort,†CS projects.
“Bigger picture, below 1.2042 would raise the prospect of a much more significant top, targeting 1.1876 next. Resistance moves to 1.2379 initially, then 1.2394 with 1.2441/57 expected to cap to keep the trend lower,†CS adds.
In line with this view, CS maintains a short EUR/USD position from 1.2500 targeting 1.2230.
Meanwhile, in USD/JPY, CS thinks that the immediate risk stays higher for 122.22 initially, ahead of the 124.16 high of 2007.
“Bigger picture, we suspect strength could potentially extend as far as the 124.16 high of 2007,†CS projects.
“Support moves to 120.69, followed by 120.26/19. A break below the latter is needed to see further weakness towards 119.34,†CS adds.
In line with this view, CS entered a fresh long position today by buying the current dip from  120.70, targeting a move towards 123.90.Â
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