USD/JPY potential false break points to 106.01 – Commerzbank

In light of the recent price action, spot should now meet initial hurdle in the 106.00 neighbourhood, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“USD/JPY’s recent break to a new low was been accompanied by a large divergence of the daily RSI and we suspect that this was a false break lower. As is often seen in these instances the market then moves sharply in the opposite direction. We opted to exit our shorts at cost and will attempt longs as the intraday Elliott wave count ae positive. Rallies should now find initial resistance offered by the 20 day moving average at 106.01”.

“A rise above the 107.90 level is required to negate this view and imply recovery to the 110.48 February high”.