TD Research discusses EUR/JPY outlook and likes short exposure in spot targeting a move towards 126.
"While we think it is problematic to be long the yen vs. the USD owing to the higher Tsy yield backdrop, we prefer to express this on crosses that offer some insulation," TD notes.
"EURJPY has thus far rejected multi-year trend line resistance, which broadly coincides with 130.50. A move above will require a much more impressive EUR setup, which still seems like a distant proposition at this time with Europe poorly managing its vaccine rollout and delaying its participation in a global growth uptick. As a result, we have added a short EURJPY position," TD adds.