USD/JPY has completed an important top below 105.98 to mark a more material turn lower with support seen initially at 105.20/14 and with the resistance at 106.65/70 ideally capping, the Credit Suisse analyst team reports.

“USD/JPY has seen an aggressive collapse as the USD itself continues to weaken on a broad basis, removing key support from the lows from May and June and ‘neckline’ support at 106.15/105.98 to mark the completion of an important top and more material turn lower.” 

“We see support next and initially at 105.20/14 – the 61.8% retracement of the March rally – and although we may see an initial rebound from here we look for a break in due course with support seen next at 103.98/94, then 103.43 – the 78.6% retracement of the rally from March – with the ‘measured top objective’ seen set lower at 102.34.” 

“Resistance is seen at 105.88/98 initially, with the immediate risk seen lower whilst below 106.21. Above can see a deeper rebound to 106.65/70, but with strength now not ideally extending back above here.”