A further drop remains on the table in the coming weeks if USD/JPY breaks below 114.40say currency strategists at the UOB Group.
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24 hour view: “Yesterday we highlighted that ‘the rapid rebound appears to be getting ahead of itself and USD/JPY is unlikely to strengthen much further’ and we expected USD/JPY to ‘trade into a range of 114.70/115.30’. USD/JPY moved into a tighter range than expected (114.90/115.19) The underlying tone has weakened a bit and USD/JPY is likely to move lower even though it is unlikely to challenge major support at 114.40 (114.70 is already a pretty strong level). Resistance is at 115.15, followed by 115.30.”
Next 1-3 weeks: “Our narrative from two days ago (Feb 22, USD/JPY at 114.75) still stands. As highlighted, the downside momentum has slightly improved and there is room for USD/JPY to go lower, but it has to break 114.40 before a more sustained decline can be expected. Only a break of 115.30 (no change in ‘strong resistance’ level) would indicate that the current downside pressure has subsided.”
Source: Fx Street
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