USD/JPY to extend its correction lower on a close below the 55-DMA at 109.82 – Credit Suisse

USD/JPY has completed a bearish “reversal day” from flagged resistance at 110.72/82. A close below the 55-day average at 109.82 would warn of a more protracted corrective phase, according to the Credit Suisse analyst team.

A bearish “reversal day” sees the risk turn back lower

“USDJPY has not only rejected key resistance from the back of the broken uptrend from January as well as price and retracement resistance at 110.72/82 but has completed a bearish “reversal day” in the process. This has seen the risk turn quickly lower again for a retest of key support from the 55-day average at 109.82.” 

“A close below the 55-day average at 109.82 can open the door to a more protracted corrective phase lower with support then seen next at the recent low at 109.53, below which should see support next at 109.23/07 – the June lows and 61.8% retracement of the April/July rally.” 

“Resistance moves to 110.20 initially, then 110.54. Above 110.82 is needed to rekindle thoughts of a broader basing story to reassert an upward bias again for strength back to 111.20 initially, then the current cycle highs at 111.66/72, with long-term resistance seen layered at 111.93 through 112.40.”