Additional weakness has the potential to drag USD/JPY down to the 131.65 level. in the coming weeks, according to UOB Group currency strategists Lee Sue Ann and Quek Ser Leang.
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24 hour view: “USD/JPY turned down and sank as low as 132.01 before bouncing to close at 132.87 (-1.67%). The bounce amid oversold conditions suggests that USD/JPY is unlikely to weaken further. For today, it is USD/JPY more likely to consolidate and trade between 132.30 and 133.60.”
Next 1-3 weeks: “Our view on Monday (Aug 8, USD/JPY at 135.40) that USD/JPY could go as high as 136.00 was invalidated as USD/JPY fell below our “strong support” level at 134.00. There is Note that USD/JPY closed down 1.67% (close at 132.87 in New York), its biggest one-day drop since November 2021. While short-term oversold conditions could lead to a couple of days of consolidation first, impulsive decline could extend to 131.65 later. Current USD/JPY weakness is intact as long as the pair doesn’t move above 134.40 (“strong resistance” level).”
Source: Fx Street
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