Karen Jones, Head of FICC Technical Analysis at Commerzbank, expects initial contention in the pair to emerge at 111.84.
“USD/JPY is correcting lower very near tem, the recent high at 113.44 was accompanied by a divergence of the daily RSI. This tends to reflect a loss of upside momentum and the market has started to ease lower. The 200 day ma offers initial support at 111.84 but we would allow for a deeper sell off to the 55 day ma at 110.69, while above here it will remain well placed for recovery. Above 112.85 will trigger further gains to the top of the range at 114.38/49”.
“The 55 day ma guards the 109.50 level and support at 109.50 guards the 108.13 April low and the recent low at 107.32”.
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