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Further decline in USD/JPY is likely to find contention in the 103.00 region in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘trade sideways’ was wrong as it dropped to 103.43 before closing on a soft note at 103.52 (-0.36%). Further weakness is not ruled out and while USD could dip below the strong support at 103.40, oversold conditions suggest 103.00 is unlikely to come into the picture. Resistance is at 103.75 followed by 103.90.”

Next 1-3 weeks: “Yesterday (20 Jan, spot at 103.90), we highlighted that USD ‘could continue to trade sideways, likely within a 103.40/104.40 range’. USD is currently approaching the bottom of the range at 103.40 and shorter-term momentum is beginning to improve. The bias is tilted to the downside but any weakness is likely limited to a test of the major support at 103.00. On the upside, a break of 104.20 would indicate the current mild downward pressure has eased.”