USD/JPY has completed a large bullish “outside day”. Economists at Credit Suisse look for a test of resistance from the August high at 110.81. A break above here should then open up a move back to long-term resistance at 111.66/112.40.
See: Nikkei 225 to surge higher above 30000 towards the 32120 resistance – Credit Suisse
Support at 109.69/59 ideally holds
“A strong session for USD/JPY yesterday with a bullish ‘outside day’ established, reflecting in some part we think the strong performance and key breaks higher in Japanese equities. We would typically expect the JPY to weaken in such an environment and we thus look for a test of resistance from the August high at 110.81.”
“A break above 110.81, which we think pressure is building for, should then open up a move back to the 2021 high at 111.66, which is the start of an important long-term resistance zone, which stretches up to 112.23/40. Above here at any stage would mark an important and large medium-term base.”
“Support moves to 110.25 initially, below which can ease the immediate upward bias for a retreat back to 109.94, potentially 109.69/59, but with this now expected to remain a solid floor.”