USD/JPY to extend its correction lower to 111.66 and rebound from here – Commerzbank

USD/JPY closed the last four trading days in the red and seems to have gone into a consolidation phase around 113.00. Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, expects the pair to extend its fall to the 111.66 July high and recover from here.

Viewed as minor top

“We are viewing USD/JPY as having topped near term.”

“The pair is likely to see a deeper retracement to 112.56 then 111.90, the 38.2% and 50% retracements. The 111.66 July high is also found in this vicinity and we will ideally see the market recover from here.”

“Rallies are likely to find the 20-day ma at 113.80 ahead of 114.55/69, the November 2017 high and recent high.”

“Loss of 110.80 is needed to destabilise the chart and allow for a deeper sell-off to key near-term supports at 109.07/10 and 108.73 (July and August low).”

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