USD/JPY scope for a test of the mid-118.00s – Commerzbank

According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, spot could attempt a new visit to the 118.50 area, its 16-month resistance line.

Key Quotes

“USD/JPY has completed an ‘a-b-c’ correction and is well placed to tackle its the 16 month resistance line at 118.52, it is currently consolidating. We need a close above here to confirm upside scope. Above the 118.60/66 recent highs we target 120.00/120.10, the 78.6% retracement of the move down from 2015. The 120.10 level is regarded as the last defence for the June 2015 high at 125.86”.

“While capped 118.54/66 we are unable to rule out a deeper retracement to the 114.54 then 111.98 area. These are the 23.6% and the 38.2% retracements of the move up from November. However the market continues to indicate that this is an ‘a-b-c’ correction only and that it has already ended”.