USD/JPY: Break above 112.40 to signal a more sustained change of trend higher – Credit Suisse

Repeated successful defense of key price support at 109.12/11 and then a bullish “outside day” has acted as the catalyst for USD/JPY to stage a strong move higher. Economists at Credit Suisse look for a break above the 110.81 August high for a test of long-term resistance, starting at 111.66 and stretching up to 112.40. 

Support moves higher to 109.90/76

“With US yields having completed near-term bases and expected to rise further we look for a break above the August high at 110.81 to add further momentum to the rally for a test on long-term resistance, starting at 111.66 and stretching up to 112.40.” 

“Whilst the 112.40 resistance should continue to be respected, an eventual break would now see a much more important and large base complete to signal a more sustained change of trend higher.”

“Support moves to 110.25 initially, with the 55 -day average and recent low at 109.90/76 now ideally holding to keep the immediate risk higher.”