USD/JPY: Further upside loses traction – UOB
|The prospects for extra gains in USD/JPY seem to be losing some impulse, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “Our expectation for USD to ‘trade sideways’ last Friday was incorrect as it dropped to 105.22 before closing on a soft note at 105.43 (- 0.22%). While downward momentum is not exactly strong, there is room for USD to retest the 105.20 level before a more sustained recovery can be expected. The prospect for a break of the ‘strong support’ at 105.00 is not high. Resistance is at 105.70 followed by 105.90.”
Next 1-3 weeks: “Last Tuesday (16 Feb, spot at 105.40), we highlighted that USD ‘is expected to trade with an upward bias and a break of 105.76 would shift the focus to 106.00’. USD subsequently soared to 106.21 before easing off. Last Friday (19 Feb, spot at 105.75), we indicated that USD ‘could consolidate for a few days first before pushing higher to 106.35’. We did not quite anticipate the rapid drop to 105.22. Upward momentum has waned quickly and the prospect for further USD strength has diminished considerably. In order to rejuvenate the flagging momentum, USD has to move and stay above 105.90 within these 1 to 2 days or a break of the ‘strong support’ at 105.00 would not be surprising (and would indicate that 106.35 is out of reach this time round).”
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