UOB Group currency strategists believe that USD / JPY could still go down in the coming weeks.
Key Comments:
24 hour view: “Our expectation that USD / JPY would ‘trade sideways’ was incorrect as the pair tumbled to 108.00. While the sharp and rapid decline seems overdone, USD / JPY could test 107.90 first before it can be expected. stabilization. For today, next support at 107.70 is unlikely to enter the scene. Resistance is at 108.40 followed by 108.60 “.
Next 1-3 weeks: “Two weeks ago (April 6), when USD / JPY was trading at 110.30, we highlighted that ‘there is a short-term ceiling.’ As USD / JPY declined, in our last narrative last Wednesday (April 14 , USD / JPY at 108.85), we note that ‘the bearish momentum is starting to wane, but there is still a chance that USD / JPY will move to 108.40’. We add that ‘further weakness to 108.00 is not ruled out, but the odds for such a move to occur are low. ” After trading quietly and within relatively tight ranges for a few days, USD / JPY broke 108.40 and fell to 108.00 yesterday (April 19). Improved bearish suggests further USD / JPY weakness is likely, there is another major support at 107.65. In other words, 107.65 may not enter the scene as soon. On the upside, a breakout of 108.85 (‘resistance’ level strong ‘previously at 109.20) would indicate that the retro cease is over “.
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