USD/JPY saw a strong close to last week and has seen a clear break of the 137.21 high of September 1998 to leave the market approaching the key 140.00 psychological barrier. However, the pair is expected to hold below the latter for now and enter a consolidation phase, economists at Credit Suisse report.

140.00 to cap at first for a consolidation phase

“We suspect USD/JPY will remain capped below 140.00 for now and a consolidation phase can emerge.”

“Support for a pullback is seen at 137.87 initially, ahead of the13 -day exponential average and price support at 137.08/136.94, which we look to try and hold for now. Below though can see a deeper setback to support seen next at 136.20.” 

“Big picture though, consolidation will remain seen temporary ahead of an eventual sustained move above 140.00, with 147.62/153.01 still our long-held ultimate objective.”