The probability of USD/JPY testing the 126.00 region in the coming weeks seems to have diminishedaccording to UOB Group currency strategists Lee Sue Ann and Quek Ser Leang.
Key comments
24 hour view: “Last Friday, USD/JPY moved relatively calmly between 126.66 and 127.25 before closing flat at 127.11 (-0.02%). The move is likely to be part of a consolidation phase and USD/ JPY moves sideways, although slightly firm underlying tone suggests 126.70/127.30 range tops.”
Next 1-3 weeks: “In our latest story last Wednesday (May 25, USD/JPY at 126.95), we highlighted that USD/JPY’s oversold decline has room to extend to 126.00, possibly 125.60. Since then, USD/JPY has not been able to move lower as it has traded sideways.The bearish momentum has diminished considerably and the chance of USD/JPY going down to 126.00 has diminished.However, only breaking above 127.60 (‘strong’ level resistance’ previously located at 127.90) would indicate that the bearish pressure that started over two weeks ago is over.
Source: Fx Street
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