USD/JPY expected to recover from 113.20 – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair should find strong support around 113.20.

Key Quotes

“USD/JPY is downside corrective and is inching lower towards the 55 day ma at 113.26. The market continues to indicate that this is an ‘a-b-c’ correction only and the market should hold down here and recover. We are unable to rule out at this stage a deeper retracement to the 111.98 area. This is the 38.2% retracements of the move up from November”.

“Key short term resistance is the 16 month resistance line at 118.43. 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”.