Credit Suisse recommends to short USD/JPY

USDJPY’s phase of strength throughout June/July has been capped below the 55-day average at 105.65 and well ahead of the more important barrier at the 38.2% retracement of the 2015/16 decline at 109.27. With the USD also now under heavy pressure we remain bearish with our immediate focus on support at 100.00/99.01 – the June/July lows and psychological support. While an initial hold would be expected here, a break below it can then open up further weakness to price support at 96.57 next, with firmer levels foreseen at the 61.8% retracement level at 94.78, where we would look for a floor.
Resistance shows first at 103.99, then 105.64, with 107.50 expected to cap. Above here is needed to target the 38.2% retracement at 109.27, which is expected to provide a ceiling.
Trade: Sell at 103.99/104.00, stop above 107.50 for 95.00. Also sell below 99.01.

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