Economist Lee Sue Ann and Market Strategist Quek Ser Leang from UOB Group comment that further decline could force USD/JPY to revisit the 128.00 zone short term.
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24 hour view: “Although we expected USD/JPY to fall yesterday, we were of the opinion that ‘a sustained decline below 131.30 seems unlikely'”. We underestimated the bearish momentum as USD/JPY plummeted to a low of 128.86 before closing weakly at 129.22 (-2.45%).Although the decline seems exaggerated, the USD/JPY weakness shows no signs of stabilizing.In other words, USD/JPY could continue to weaken, although it remains to be seen if it has enough momentum to move lower to the Next support at 128.00. Resistance is at 129.70, but only a break of 130.50 would indicate USD/JPY weakness has stabilized.”
Next 1-3 weeks: “Our most recent analysis was from Monday (Jan 9, USD/JPY at 132.10), where we highlight that USD/JPY is likely to trade within a wide range of 130.50 and 134.50. Yesterday’s sharp sell-off, which dropped below 130.50 (128.86 low) was a surprise Although price developments suggest risk to USD/JPY has shifted to the downside, the pace of any further decline is likely to be slower Support is at 128.00, followed by 126.35.To the upside, breaking above 131.30 would indicate that the current build in bearish momentum has subsided.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
