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USD/JPY ideally stays capped at its 55-day average and highs at 104.75/77 with the broader risk still seen lower, analysts at Credit Suisse apprise.

Key quotes

“USD/JPY strength has been capped as expected ahead of the top of its range and 55-day average at 104.75/77 and we continue to and for the risk to then turn lower again.” 

“Support moves to 103.92 initially, then 103.63, beneath which should reassert the downtrend with potentiall trend support from March seen at 103.45 today, then more importantly at the early November low at 103.20/17. Whilst a fresh hold here should be allowed for, an eventual break can resolve the range of the past month lower for a more concerted decline with support seen at 102.80/74 and evebtually and more importantly at 101.63/18.”

“Near-term resistance moves to 104.29, then 104.59. Above 104.75/77 would instead see a base complete to suggest a more sustained rally can emerge with resistance seen next at the potential downtrend at 105.11/18, then more important price resistance at 105.68/75.”