USD/JPY risks further retracements and a potential test of the 106.00 neighbourhood in the near-term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “Yesterday, we detected the ‘slightly weakened underlying tone’ and expected USD to ‘trade at a lower range of 107.00/107.55’. USD subsequently dropped to 106.94 and closed on a soft note at 107.00 (-0.30%). It extended its decline this morning and the risk from here is for USD to weaken towards last week’s 106.56 low. A dip below this level would not be surprising but the next support at 106.30 is likely out of reach. Resistance is at 107.05 followed by 107.25.”
Next 1-3 weeks: “After closing largely unchanged for 3 days in a row, USD slipped and closed down by -0.30% yesterday (17 Jun). Downward momentum is showing sign of picking up but as highlighted since last Thursday (11 Jun, spot at 107.05), USD has to close below 106.70 before a sustained decline can be expected. The prospect for such a move has increased and would continue to increase as long as USD does not move back above 107.60 (‘strong resistance’ level previously at 108.00). Looking forward, if USD closes below 106.70, it could weaken towards last month’s low near 106.00.”
Share
