USD/JPY extends its consolidation phase following strength to just shy of the psychological 140.00 barrier. In the opinion of economists at Credit Suisse, the pair is expected to consolidate for a lengthier period of time.

Break above 135.56/59 to suggest the risk may be turning higher again

“We look for this corrective phase to extend further and potentially for a lengthy period of time.”

“Support is seen at 132.52 initially, below which would warn of a fall back to 130.40, then the 38.2% retracement of the 2022 rally at 129.50.” 

“We would not rule out a test of the ‘neckline’ to the multi-year base at 127.40, but our bias remains to look for an important floor in this 129.50/127.40 zone.”

“Above 135.56/59 is needed to suggest the risk may already be turning higher again for a retest of 139.40/140.00.”