Further downside pressure could drag USD/JPY to the 127.00 zone in the coming weeks, according to UOB Group currency strategists Quek Ser Leang and Peter Chia.
Key comments
24 hour view: “Last Friday, USD/JPY moved sideways within a relatively tight range between 127.52 and 128.29 before closing largely unchanged at 127.85 (+0.04%). The move is likely part of an ongoing consolidation phase. In In other words, USD/JPY could continue to move sideways, and is expected to be range bound at 127.35/128.35.”
Next 1-3 weeks: “USD/JPY fell sharply to 127.01 last Thursday before bouncing back. Although the downward momentum has eased a bit, there is room for USD/JPY to retest 127.00. A break of this level is not ruled out, but at this point any further declines are expected to face strong support at 126.50. Overall, only a break of 128.90 (“strong resistance” level) would indicate that the current downside pressure has eased.”
Source: Fx Street
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