USD/JPY: Scope for a deeper setback to 109.38 – Credit Suisse

USD/JPY stays seen at risk to a deeper corrective setback to its mid-March high at 109.38/36, potentially the 23.6% retracement of the Q1 rally at 108.99, analysts at Credit Suisse appraise.

USD/JPY set for a deeper setback, but with weakness still seen as corrective
“With support from its 13-day exponential average as well as price support at 109.85/75 broken we continue to look for a more concerted corrective setback. Below 109.58 should add weight to this view with support seen next at 109.38/36, the mid-March high.”
“An overshoot to the 23.6% retracement of the entire Q1 rally at 108.99 should be allowed for, but our bias would be to look for a floor in this 109.38/108.99 zone. Should weakness directly extend this can expose what we see as more important support at 108.50/33.”

“Resistance is seen at 109.95/97 initially, above which can now ease the immediate downside bias for a move back to 110.15 initially, then 110.57/75. Above this latter level though is needed to suggest the corrective setback is over.”