USD/JPY maintains its strong recovery for a break above the recent reaction high at 115.06 to mark a fresh base. As the Credit Suisse analyst team notes, the risk has turned back higher with key resistance seen at 116.35/75.

Support at 114.48 now ideally holds

“USD/JPY above 115.06 sees a base established to clear the way for strength back to 116.35/75, then the long-term downtrend from April 1990 at 116.75.” 

“Whilst a fresh cap at 116.75 should be allowed for, with a major base established last year we continue to look for an eventual clear break above 116.75 in due course. This should then clear the way for a move to the 118.61 highs of late 2016/early 2017.” 

“Support moves to 115.16/06 initially, then 114.49, with 114.48 now ideally holding to keep the immediate risk higher. Below would warn of further ranging and a fall back to 113.78.”