The USD/JPY risks falling below 127.50 as long as it trades below the 130.10 levelnote UOB Group currency strategists Lee Sue Ann and Quek Ser Leang.
Key comments
24 hour view: “Although we expected USD/JPY to weaken yesterday, we are of the opinion that ‘any weakness is expected to find strong support at 129.20.’ before rising again. The drop appears to have been overdone and USD/JPY is unlikely to weaken further. For today, we expect USD/JPY to trade between 128.00 and 129.50.”
Next 1-3 weeks: “On Tuesday (May 10, USD/JPY at 130.10), we highlighted that USD/JPY appears to have entered a consolidation phase and is likely to move between 128.40 and 131.00. Yesterday (May 12), USD /JPY broke 128.40 and tumbled to 127.50 before rebounding sharply While price action suggests USD/JPY could stage a deeper pullback, short-term oversold conditions could lead USD/JPY to trade lower above 127.50 for a couple of days.Overall, only a break of 130.10 would indicate that USD/JPY is not ready to move below 127.50.Looking ahead, support levels below 127.50 are at 127.00 and 126.00”.
Source: Fx Street
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