USD/JPY to turn back higher as 108.55 provides solid support – Credit Suisse

USD/JPY is drifting lower. The pair traded as low as 108.84, bouncing just modestly from this last but still below 109.00. However, economists look for the uptrend from January and 55-day average at 109.00/108.55 to hold to keep the risks higher. 

Resistance seen back at 109.71/79

“We look for USD/JPY to hold above the key 55-day average at 109.00 and the uptrend from January just below at 108.55 and for the risks to turn back higher, reinforced by the tentative turn back higher in daily MACD momentum.” 

“Key near-term resistance moves to 109.29, above which would relieve the recent downside pressure, with more important resistance remaining at 109.71/75, above which is needed to clear the way for strength back to the late March high and potential downtrend from February 2020 at 110.82/97.”

“Whilst a fresh rejection from 110.82/97 should be expected, above in due course can open the door to a test of much important resistance at 111.96/112.40.” 

“Key supports remain at the 55-day average at 109.00/85, then the uptrend from the 2021 lows at 108.55/35, which ideally holds any further weakness.”