The downside momentum in USD / JPY is expected to pick up after a close below the 109.30 level. in the short term, note the currency strategists at UOB Group.
24 hour view: “The sharp decline in USD / JPY to 109.51 yesterday was a surprise (we expected USD / JPY to move sideways). While the rapid decline is oversold, the weakness is showing no signs of stabilizing. In other words, USD / JPY could weaken further despite oversold conditions suggesting that any weakness is unlikely to break main support at 109.30. Resistance is at 109.85, followed by 110.00. “
Next 1-3 weeks: “We have expected USD / JPY to move between 109.30 and 110.55 for about a month now. The pair fell sharply yesterday and the downside momentum is starting to improve. While downside risk has increased, USD / JPY it has to close below 109.30 before a sustained decline can be expected (next support is at 109.00). On the upside, a breakout of 110.15 would indicate that USD / JPY is not ready to go down yet. “