Credit Suisse discusses USD/JPY technical outlook and highlights the importance of a break below the 107.56/51 level to confirm the downtrend.
"USDJPY failed to clear key resistance from the 38.2% retracement of the fall from April at 108.93, avoiding a small ‘head and shoulders’ base to see a sharp turn lower within the recent range. Support moves to 107.74/71 initially, ahead of better support at 107.56/51, which we ideally look to hold above to maintain the upside pressure within the range," CS notes.
"A clear break below 107.56/51 remains needed to confirm the recovery effort is over, with potential uptrend from January then seen at 106.97. Below would clear the way for a move back to retest the current low and "neckline" to the early 2018 base at 106.78/69, where we would expect to see renewed buying," CS adds.