USD/JPY: Break above 110.60/70 to clear the way for a retest of 111.66 – Credit Suisse

USD/JPY has posted a bullish “reversal day” to suggest the worst of its sell-off may be over. According to economists at Credit Suisse, a break above 110.60/70 is needed to clear the way for a move back to long-term resistance, seen starting at 111.66.

Support is seen at 109.70

“USD/JPY maintains a strong tone following its bullish ‘reversal day’ last week. With 10-year US bond yields also rising from our 1.135/075% resistance/objective we maintain an immediate bullish bias.”

“Key resistance is seen at the highs posted in the second half of July at 110.60/70, a break above which is needed to open the door to a challenge on long-term resistance starting at the 111.66 July YTD high and stretching up to the 112.40 high of 2019.” 

“Support is seen at 109.89 initially, with 109.70 ideally now holding to keep the immediate risk higher. A break can see a deeper pullback to 109.41/24, but with fresh buyers expected here.”