USD/JPY now risks a downside to the 107.00 region, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday ‘downward momentum has picked up’ and were of the view USD ‘could move lower to 109.90’. The subsequent decline in USD exceeded our expectation as USD dropped to an overnight low of 109.19. Downward momentum remains strong and USD could drop further to 108.30. On the upside, only a move above 110.10 (minor resistance is at 109.60) would indicate the current strong downward pressure has eased.”
Next 1-3 weeks: “We highlighted yesterday (26 Mar, spot at 110.70) that ‘risk of a short-term top has increased’. That said, the sudden lunge lower that sent USD plummeting to a low of 109.19 was unexpected. From here, further weakness towards 107.00 would not be surprising. On the upside, USD should stay below the ‘strong resistance’ level of 110.60, at least for one week or so.”
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