USD/JPY: Further downside could lose traction – UOB

Pablo Piovano FXStreet

UOB Group’s FX Strategists noted the probability of extra declines in USD/JPY could be running out of steam.

Key Quotes

24-hour view: “Our expectation for USD to ‘test the 103.70 support’ was incorrect as it rebounded strongly after touching 103.81. The relatively choppy price actions have resulted in a mixed outlook. USD could continue to trade in a choppy manner, albeit likely within a higher range of 104.00/104.50.”

Next 1-3 weeks: “We highlighted yesterday that ‘downward momentum is beginning to improve but USD has to close below 103.50 in order to indicate that it is ready to tackle the month-to-date low at 103.18’. We added, ‘the odds for such a move appear to be quite high as long as USD does not move above 104.50 within these 1 to 2 days’. USD dropped to a low of 103.81 before staging a surprisingly sharp rebound (overnight high of 104.40). There is no change in our view for now but unless USD can stay below 104.00 within these 1 to 2 days, the odds for further weakness would diminish quickly.”

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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