FX Strategists at UOB Group expect further softness in USD/JPY, although a break below the 107.00 handle would not be favoured for the time being.
Key Quotes
24-hour view: “While our view for USD to ‘edge above 108.50’ yesterday was not wrong (overnight high of 108.62), the sharp sell-off after the close in NY was clearly unexpected (Iran headlines sent USD to a low of 107.80 at the time of writing). Further weakness appears likely but 107.50 is a relatively strong support and may not yield so easily (the next support of note is further down at 107.00). Resistance is at 108.20 followed by 108.50.”
Next 1-3 weeks: “As highlighted, the weakness is not showing sign of stabilization and USD could continue to weaken. However, the prospect for a break of the mid- to long-term support at 107.00 is not high for now. On the upside, a breach 108.85 (no change in ‘strong resistance’ level) would indicate that the weakness has stabilized.”
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