SocGen's Kit Juckes fancies buying EURJPY
SocGen are looking to buy EURJPY and are hoping to get a decent dip ahead of the French elections. Macro Strategist, Kit Juckes explains why;
"The bounce in USD/JPY has allowed EUR/JPY to bounce off 120. We would really, really like to get EURJPY longs in place at 115, between now and the French election, with a target around 130.
Bloomberg have started tracking betting on for the main candidates in the French election and the trend, a the moment, is for Marine Le Pen to improve while Emmanuel Macron, her main challenger, marks time (albeit with a significant lead). EUR/USD peaked at about the same time as that lead peaked and with protests in the French suburbs this weekend, the risk of continued nervousness seems pretty clear.
We'd still, in general, like to get long Euros closer to the vote and at cheaper levels."
Given the range in EURJPY since late last year, after the rally from 112, his entry looks a long shot. However, this is a yen cross and 200-300 pip moves in minutes is not unheard of, so anything's possible as the French election heats up.
There's a couple of good looking support levels on the daily chart. Around the 118.30/60 and 116.30/50 areas, with the latter looking the strongest. The ascending lower trend line could be a consideration too. That's comes in currently at 114.35 odd.
EURJPY daily chart
