Corrective rebound in EUR/USD is evolving within a flag and a test of 1.1565 is not ruled out, says SocGen.
“However, a move above will be needed to signal a test of weekly upward channel at 1.1875. 1.1085 is likely to hold short-term retracement while flag limit at 1.0940 will decide if a revisit of 1.05/1.04 happens with 1.08 as intermittent target,” SocGen adds.
Turning to USD/JPY, SocGen notes that after facing stiff resistance at multiyear trend (126), USD/JPY has pulled back and achieved graphical support at 118.20.
“The pair has confirmed a double top suggesting possibility of further correction toward 115.50/114. A break below would instigate an extended retracement. 122 should cap upside while 126 remains a key resistance,” SocGen argues.