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USD/JPY could slip back to the mid-103.00s and below in the next weeks according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that ‘the underlying tone has weakened somewhat, and this could lead to USD edging downwards to 103.95’. We added, ‘the next support at 103.70 is not expected to come into the picture’. Our view was not wrong as USD dropped to a low of 103.89 before closing at 104.10 (-0.14%). Downward momentum is beginning to improve and the risk is for USD to test the 103.70 support. A dip below this level is not ruled but it is left to be seen if USD can maintain a foothold below this level (next support is at 103.50). Resistance is at 104.10 followed by 104.30.”

Next 1-3 weeks: “Last Tuesday (24 Nov, spot at 104.55), we indicated that ‘downward pressure has dissipated’ and we expected USD to ‘trade between 103.70 and 105.30’. USD subsequently traded mostly sideways but is currently approaching the bottom of the range and downward momentum is beginning to improve. That said, USD has to close below 103.50 in order to indicate that it is ready to tackle the month-todate low at 103.18. The odds for such a move appear to be quite high as long as USD does not move above 104.50 within these 1 to 2 days.”