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The USD/JPY pair has reversed dramarically higher, negating last week’s bearish “outside week” but still needs to clear 105.75/92 to suggest a base has been established, the Credit Suisse analyst team informs.

Key quotes

“USD/JPY has seen an abrupt and aggressive reversal of its bearish ‘outside week’ for surge back well above key support at 104.02/00 not only negating last week’s session but also raising the prospect of a near-term base instad.” 

“Key resistance moves to 105.75/92 – the 38.2% retracement of the fall from June and price resistance – a close above which would also see the 55-day average removed to suggest a base is also now in place and a more sustained recovery can be seen. We would then see resistance next at 106.11, then further retracement resistance at 106.43/56.”

“Support moves to 104.74/70 initially, below which can see a fall back to 104.41, then 104.02/00 again, but with fresh buyers expected here.”