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There are still bets for USD/JPY to break below the key 104.00 level in the near-term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while the underlying tone has firmed somewhat, any advance from here is viewed as part of a higher trading range of 104.50/105.00’. Our view was not wrong even though USD traded within a narrower range than expected (104.52/104.94). The price actions offer no fresh clues and we continue to expect USD to trade between 104.50 and 105.00 for now.”

Next 1-3 weeks: “There is not much to add to our update from last Thursday (29 Oct, spot at 104.35). As highlighted, ‘downward momentum has improved albeit not by much’. We added, ‘the risk of a break of 104.00 has increased and would continue to increase as long as USD does not move above 105.00’. While USD subsequently dropped to a low of 104.01, it has not been able to make much headway on the downside. From here, a break of 104.00 is not ruled out just yet but in order to rejuvenate the current flagging downward momentum, USD has to move and stay below 104.50 these few days or a break of 105.00 would indicate that USD is not ready to move below 104.00.”