FXStreet reports that analysts at Credit Suisse note that USD/JPY strength has been capped at 106.04, its accelerated moving average, and despite the recent bullish “reversal day” the immediate risk is seen lower with support awaiting at 105.27.

“Although USD/JPY posted a bullish ‘reversal day’ earlier this week after failing to hold a break below 105.27 – the 61.8% retracement of the rally from late July – the recovery has been unable to clear the 13-day average, now at 106.04, and the immediate risk stays seen lower whilst below here.”

“Beneath 105.53 is needed to further increase downside momentum with support then seen next at 105.27, then more importantly at the 105.18/10 lows. Below here can negate the ‘reversal day’ for a resumption of the core downtrend with support then seen next at 104.65/55.”

“A close above 106.04 can see an extension of the recovery with resistance next at 106.44/46, then the 55-day average at 106.62/67, which we look for then ideally cap to define the top of a near-term range.”