The USD / JPY could fall back to the 107.30 region in the coming weeks, say UOB Group currency strategists.
Key Comments:
24 hour view: “We expected USD / JPY to weaken last Friday, but we are of the opinion that ‘main support at 107.65 is unlikely to be threatened.’ However, USD / JPY tumbled to 107.45 before rising again to close with little change on the day (107.91, -0.05%). Sharp and rapid changes have led to mixed outlook. For today, USD / JPY could trade between 107.50 and 108.20 “.
Next 1-3 weeks: “Our last narrative was from last Tuesday (April 20, USD / JPY at 108.15), where we highlighted that ‘further USD / JPY weakness is likely, but 107.65 may not enter the scene so soon.’ quietly for a few days, USD / JPY tumbled below 107.65 on Friday. However, the decline was short-lived as it quickly recovered from 107.46. While the near-term outlook is mixed, the current weak phase of the USD that started about 3 weeks ago is still intact. Only a breakout of 108.40 (previously ‘strong resistance’ level at 108.55) would indicate that the weak phase is over. Until then, there is a possibility that the USD / JPY turns down to 107.30 The outlook for the weakness to extend to 107.00 is not high for now. “
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