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Karen Jones, analyst at Commerzbank, suggests that the USD/JPY pair will shortly reach much tougher resistance offered by the 200 day ma and the October low at 111.30/41 as it has eroded the top of a short term channel which is located at 110.94 today.

Key Quotes

“It is currently bid above the 20 day ma at 109.80 and this guards the base of the channel at 109.00. We remain suspicious of the current rally and continue to favour failure, most of our signals remain negative and we will again attempt shorts. The base of the channel at 109.00 guards the 107.75/50 band.”

“Resistance at 111.38/41, the 26th October low, guards 112.23, the 6 th December low and the top of the range at 113.84.”