The currency strategists of the UOB Group point out that the USD / JPY remains within the range of 109.10-110.30 for the moment.
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24 hour view: “We highlighted yesterday that ‘diminishing downside momentum coupled with oversold conditions suggests limited downside risk for USD / JPY’ and we expected USD / JPY ‘to consolidate and trade between 109.10 and 109.70’. Instead of consolidating, however, USD / JPY rose to 109.89 before closing on a firm tone at 109.78 (+ 0.52%). While the rapid rise appears to be running ahead of itself, USD / JPY could rise by Above 110.00 first before reversing. Next resistance at 110.30 is not expected to enter the scene. Support is at 109.55, followed by 109.35. “
Next 1-3 weeks: “We highlighted yesterday that ‘downside momentum has not improved much’ and we are of the opinion that USD / JPY ‘has to close below 109.10 before a sustained decline can be expected.’ And we add: ‘The prospect of a close daily below 109.10 is not high for now, but would remain intact as long as USD / JPY does not move above 110.00 in these few days. ” While 110.00 has not broken (previous day high of 109.89), the rapid Loss of downside momentum indicates that the possibility of USD / JPY closing below 109.10 has dissipated. In other words, USD / JPY is still in a consolidation phase and could trade between 109.10 and 110.30 for a time frame.”
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