Charts and remarks via Société Générale (in brief):

  • After approaching towards the multiyear upward trend near 107.50/106.50, USD/JPY has been staging a steady recovery. It has crossed above the median of a descending channel drawn since March (now at 112.80) and is now piercing above the upper limit.
  • It did undergo a shallow consolidation recently however 111.65/111.50 has cushioned the downside.
  • The break above the channel median indicates possibility to continue the rebound towards May/July highs of 114.30/50 with next objective near the resistance line drawn since 2015 at 115.50/116. In light of daily indicators which are near a resistance line, the upside is likely to remain limited and 115.50/116 will be a decisive hurdle. 113.55/113.10 is an immediate support