UOB Group currency strategists Lee Sue Ann and Quek Ser Leang see the USD/JPY faces further downside pressure once the 126.90 region is broken.
24 hour view: “While we expected softer USD/JPY yesterday, we were of the view that any weakness would face solid support at 126.90. USD/JPY subsequently fell to a low of 127.01 before bouncing. Downside pressure has eased and USD/JPY is likely to move sideways today. Expected to be in a range of 127.20/128.20.”
Next 1-3 weeks: “Not much to add to our update yesterday (Apr 26, USD/JPY at 127.60). As highlighted, the risk of a deeper pullback in USD/JPY has increased. A clear break of 126.90 could lead to a retracement to 126.30 At this point the opportunity for a clear break of 126.90 is not high but remains intact as long as USD/JPY does not move above 128.50 (‘strong resistance’ level was at 128.80 yesterday )”.
Source: Fx Street
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