USD/JPY to turn back higher from the 111.84/66 support zone – Credit Suisse

USD/JPY has broken below its range lows at 113.30/21. Nevertheless, economists at Credit Suisse expect key supports at 112.42/40 and particularly 111.84/66 to hold ahead of a renewed turn back higher.

Strongly bullish outlook

“USD/JPY has extended its pullback further this week but with a major base in place above 112.40, we maintain our view this is a temporary and healthy setback only.” 

“We look for a move above 114.92 in due course for a test of the long-term downtrend from April 1990, currently at 117.00/02. It’s worth reiterating though the “measured base objective” is significantly above here at 122.90/123.00, however, this is very much a longer-term objective.”

“We see supports for the current pullback at 112.42/40, then 111.84/66, which includes the ‘neckline’, 55-day average and cluster of retracement supports, which we have a high degree of confidence will hold.”