In opinion of FX Strategists at UOB Group, USD/JPY could recede further and visit the 102.00 zone in the near-term.
Key Quotes
24-hour view: “Our expectation for the ‘rebound in USD to edge above 103.30’ was incorrect as it slumped to 102.59 before closing on a soft note at 102.72 (-0.37%). While downward momentum has not improved by all that much, the risk is for USD to weaken further even though 102.30 could be out of reach. Resistance is at 102.90 followed by 103.15.”
Next 1-3 weeks: “We highlighted yesterday (05 Jan, spot at 103.10) that the ‘risk is still for a lower USD but 102.60 may not break so soon’. We added, USD ‘is deemed to be under mild downward pressure as long as it does not move above 103.65’. However, USD lurched lower and edged below 102.60 (overnight low of 102.59). Downward momentum has improved and there is room for USD to weaken to 102.30, possibly 102.00. Overall, downward pressure has increased as long as USD does not move above 103.35 (‘strong resistance’ level previously at 103.65).”
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