USD/JPY further gains expected above 118.56 – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair could resume its bullish view on a close above 118.56.

Key Quotes

“USD/JPY remains capped by the 16 month resistance line at 118.56 and is downside corrective near term - we will need a close above here to resume its bull move. Currently 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 may have already ended. Initial resistance lies at 116.83/117.05”.

“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”.