FX Strategists believe USD/JPY could move to 104.40 if the 105.00 level is cleared in the next weeks.
Key Quotes
24-hour view: “We expected USD to weaken yesterday and noted that ‘a break of 105.66 could lead to further loss towards 105.30 (next support is at 105.00)’. Our view was correct as USD plummeted to a low of 105.10. After two straight days of back-to-back sharp decline, the weakness in USD appears to be overstretched. However, it is too soon to expect a sustained recovery. For today, USD is more likely to consolidate and trade between 105.00 and 105.80.”
Next 1-3 weeks: “USD dropped by -0.71% yesterday (closed at 105.37) and downward momentum has improved further. We continue to hold a negative view and as highlighted yesterday (27 Jul, spot at 105.90), ‘the next level to focus on is at 105.00’. In view of the strong downward momentum, a break of 105.00 would not be surprising. That said, shorter-term conditions are oversold and the next support at 104.40 is unlikely to come into the picture so soon. All in, USD has to move above 106.30 (‘strong resistance’ level was at 106.80 yesterday) in order to indicate the current weakness has stabilized.”
Share
