Citi discusses USD/JPY technical outlook and sees a scope for USD/JPY upside to extend towards 118.60.
"After breaking the YTD high of around 114.7 registered last month, the upside scope for USDJPY has extended to the 2016 high of around 118.6 (from the Fibonacci retracement view point). The previous YTD high largely equated to a 76.4% retracement of the decline between 2016 and 2020, as well as the 2018 high. Japanese exporters are likely to increase USD selling hedges in coming months, which we believe will ease the JPY weaning pressure at around 115-116," Citi notes.
"However, from the technical analysis view point, no major resistance exists before the 2016 high," Citi adds.