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Further downside in USD/JPY does not rule out a breach of the 104.00 level in the next weeks, in opinion of FX Strategists at UOB Group.

Key Quotes

24-hoour view: “Yesterday, we expected USD to ‘trade between 104.50 and 105.00’. USD subsequently traded between 104.42 and 104.81. The relatively quiet price actions offer no fresh clues and USD could continue to trade sideways, albeit within a broader range of 104.20/104.90.”

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.”