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According to FX Strategists at UOB Group, USD/JPY could slip back to the 107.20 region in the short-term horizon.

Key Quotes

24-hour view: “USD traded between 107.39 and 107.92 yesterday, lower than our expected sideway-trading range of 107.60/108.00. The underlying tone has weakened and the bias for today is for USD to drift lower towards 107.20. In view of the lackluster momentum, the next support at 107.00 is unlikely to come into the picture. Resistance is at 107.75 but the stronger level is still at 108.00.”

Next 1-3 weeks: “USD continues to trade in a quiet manner and the build-up in momentum from last week has dissipated. This was not exactly surprising as we indicated last Friday (22 May, spot at 107.70) that the prospect for further USD strength has diminished. The current movement is viewed as part of a consolidation phase and only a daily closing out of the expected 107.00/108.00 range would suggest the start of a more sustained movement in USD. In other words, USD is likely to trade sideways for now.”