A further decline could drag USD/JPY back to retest the 137.70 zone in the coming weeks, according to economist Lee Sue Ann and market strategist Quek Ser Leang of UOB Group.
24 hour view: “Although we expected USD/JPY lower yesterday, we did not expect a break of the strong support at 140.30. However, USD/JPY broke 140.30 and plunged to a low of 139.15. Momentum to the downside indicates a further decline. Level to watch is 138.50, followed by 137.70. This last level is unlikely to appear today. Resistance is at 139.80, followed by 140.30.”
Next 1-3 weeks: “After USD/JPY surged above 142.00, we indicated on Tuesday (Nov 22, USD/JPY at 141.80) that bullish momentum is building. However, we are of the view that USD/JPY has to break and stay above 142.50 before further gains are likely USD/JPY did not challenge 142.50, instead dipping below our “strong support” level of 140.30 yesterday The sharp and rapid decline has shifted risk to the downside towards 137.70. On the contrary, the “strong resistance” of 140.80 is likely to be challenged, at least for the next 1-2 days.”
Source: Fx Street
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