USD/JPY scope for a decent pullback – Commerzbank

In light of the recent price action, USD/JPY is could see a decent pullback ahead of another leg higher, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“The market finished the week above the 55 day ma and the top of the cloud and has also eroded the 15th February high at 114.95. It has for now stalled at the 115.62 mid January high and the 13 count on the 240 minute chart does suggest a decent pull back. Beyond this we look for a challenge to the key short term resistance offered by the 16 month resistance line at 117.71 – and this remains our favoured view”.

“Only below 111.59 would negate our upside bias and introduce scope to Fibonacci support at 109.92 and, if seen, the 200 day ma at 107.75. We look for this to hold (this is also the 50% retracement of the move up from November). However this is not our favoured view - we also note that the recent move lower continues to indicate that this is the end of the corrective move”.