It is expected that the downtrend in the USD / JPY finds a relevant support around 108.20say UOB Group currency strategists.
Key Comments:
24 hour view: “We highlighted yesterday that ‘the sharp and rapid decline seems exaggerated and USD / JPY is unlikely to weaken further’ and we expected USD / JPY to ‘consolidate and trade between 108.40 and 109.10’. Our opinion was not wrong. despite USD / JPY trading within a tighter range than expected (108.45 / 109.05). The underlying tone has improved somewhat, but while USD / JPY could rise, it is not expected to challenge the strong Resistance level at 109.35 (109.10 is already quite solid resistance). Support is at 108.75 followed by 108.60 “.
Next 1-3 weeks: “There is not much to add to our update yesterday (May 10, USD / JPY at 108.80). As highlighted, the short-term bias is to the downside, but we are aware of the strong support at 108.20. This level is followed by another quite strong level at 108.00. All in all, the downside bias is considered intact as long as USD / JPY does not move above 109.35 (‘strong resistance’ level). “
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