The pair could see its downside renewed to the 112.00 region, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.
“USD/JPY is showing signs of recovery ahead of the 55 day ma at 112.93. We are unable to rule out a deeper retracement to the 111.98 area at this stage. This is the 38.2% retracements of the move up from November. However the market continues to indicate that this is an ‘a-b-c’ correction only and the market should hold down here and recover”.
“Key short term resistance is the 16 month resistance line at 118.47. We need a close above here to confirm upside scope. Above the 118.60/66 recent highs we target 120.00/120.10, the 78.6% retracement of the move down from 2015. The 120.10 level is regarded as the last defence for the June 2015 high at 125.86”.