Short EURJPY via risk reversal: We remain bearish on the EUR and see the risk from political events to be tilted to the downside. This is also consistent with the EUR/JPY bearish view from our technical strategy team.
We are bearish EUR/JPY and would use upticks as an opportunity to sell at better levels. Supply is expected to emerge in the 137.65 area where we would look for signs of a top and subsequent move lower towards the 130.15 lows. A break below 130.15 would encourage our bearish view towards greater targets near 128.00/50 and then lower to the 125.00 area. An unexpected break above 137.65 would point to a stronger than initially anticipated pullback towards layered resistance ahead of 140.00 before sellers return.
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