A break below 108.50 could be indicative that the positive phase of the USD / JPY pair is over, currency strategists at UOB Group noted.
Key statements:
24-hour outlook: “Our expectation that the USD would ‘rise’ was incorrect as it fell to 108.76 before rebounding. The current move is considered part of a consolidation phase and the USD is likely to trade between 108.85 and 109.30 per today”.
Next 1-3 weeks: “We have had a positive outlook on USD for over 2 weeks. After the USD rose to a fresh nine-month high at 109.36, we highlighted on Monday (March 15, price at 109.00), that “bullish momentum has not improved much.” We add that “the USD has to close above 109.25 before a sustained rise to 109.85 can be expected.” While there is no change in our opinion, the USD could not afford to falter at these overbought levels or the risk of a pullback would increase rapidly. In other words, the USD has to start “marching” higher in these few days or a breakout of 108.50 (no change in the “strong support” level) would indicate that the current positive phase has come to an end.“.
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