USD/JPY: Risk-off is expected to see the yen strengthen further – Credit Suisse

USD/JPY stays under bearish pressure with the yen finding demand as a traditional safe haven. Economists at Credit Suisse look for further weakness with support seen at 113.58/48, then 113.15.

Resistance moves to 114.55

“Further sharp weakness in equity markets continue to see the yen strengthen on a broad basis and this leaves the spotlight for USD/JPY back on the recent low and 38.2% retracement of the rally from September at 113.58/48. Below here can see weakness extend to test the December lows, seen starting at 113.15 and stretching down to 112.56/54, with a better floor looked for here.”

“Should weakness extend this would warn of further weakness to the potential uptrend from January 2021, currently seen at 112.20, with the key long-term 200-day average now at 111.48.” 

“Resistance is seen at 113.96 initially, then 114.22, with the immediate risk seen lower whilst below 114.55. Above can raise the prospect of further choppy ranging for strength back to 115.05/06, but with a break above here needed to mark a near-term base.”