USD/JPY has extended its decline. Economists at Credit Suisse analyze the pair’s outlook.

Initial resistance seen at 139.75/76 

With a small bullish ‘reversal day’ seen here on Friday we continue to look for the ‘neckline’ at the December/May base and 200-day average, seen at 137.51 and 137.06 to ideally prove a better floor for consolidation initially ahead of an eventual move higher again.

Resistance is seen at 139.18 initially, then the 55-DMA at 139.75/76. A close above here is needed to ease the immediate downside bias with resistance then seen next at 140.48, then 141.47/57.

A close below 137.06 though would raise the prospect a more important peak may have been established in late June, with support seen next at 136.15.