In opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, technicals are suggesting a potential squeeze higher to the 112.00/45 band in the near term.
“USD/JPY has eroded support offered by the previous downtrend and the cloud and sold off aggressively, it will shortly encounter the 109.78 200 day ma and this guards the 108.13 April low. We notice the 13 count on the 240 minute chart and would allow for a near term rebound to the 112.00/45 range. Rallies will need to regain 112.45 to retarget the 114.38 recent high”.
“Above 112.20 is needed to alleviate immediate downside pressure for an attempt to recover towards the 114.38 high from last week”.