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The USD/JPY pair extends its recovery as continues gaining traction for the fourth consecutive session on Monday. Analysts at Credit Suisse are seeing the formation of a larger bullish “wedge” reversal, with resistance seen at the top of the “wedge” at 104.59/77. 

Key quotes

“USD/JPY extends its recovery as expected trend support from July, currently at 102.51 accompanied by a bullish RSI momentum divergence and has pushed above the December high and now also the 55-day average. This sees a small base complete to add weight to our view we are seeing the formation of a larger bullish ‘wedge’ reversal with resistance seen at 104.37/47 next, then more important resistance from the top of the ‘wedge’ at 104.59/77.” 

“Above 104.59/77 is needed to see a bull ‘wedge’ finally confirmed to mark a more important reversal higher to open up a move to 105.68 next, with scope for the 200 -day average at 105.93.”

“Support moves to 103.76 initially, with 103.61 now ideally holding to keep the immediate risk higher. Below can see a retreat back towards 102.94, but with fresh buyers expected ahead of here.”