USD/JPY rallies capped around 107.50/108.25 – Commerzbank

Following the recent sharp pullback, rallies in the pair should remain capped around 107.50/108/25, according to Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“USD/JPY came under extreme downside pressure on Friday”.

“The market has eroded 106.80 – the 78.6% retracement. This is considered to be the last defence for the 105.55 recent low and 105.40 2014 peak”.

“While we still consider these to be key support for the market, it is clearly going to take some time to recover, for now we suspect further weakness to test these supports and intraday would exit rallies to remain capped 107.50/108/25”.