FX Strategists at UOB Group keep their views on the neutral side for USD/JPY in the next weeks.
Key Quotes
24-hour view: “We held the view yesterday that USD ‘could weaken further 107.80’. We indicated that the next support is at 107.50. USD subsequently dropped to 107.60 before ending the day on a soft note at 107.72 (-0.65%). While the decline is deeply oversold now, there is no sign of stabilization just yet. From here, USD could dip below 107.50 but for today, the major support at 107.00 is not expected to come into the picture (there is a minor support at 107.30). On the upside, a move above 108.30 (minor resistance is at 108.10) would indicate the current weakness has stabilized.”
Next 1-3 weeks: “After surging to a high of 109.84 last Friday (05 Jun), the abrupt turnaround that resulted in huge decline yesterday (08 Jun) came as a surprise. Note that USD closed at 108.42 and lost -1.06%, the biggest 1-day drop in 10 weeks. The breach of our 108.55 ‘strong support’ level indicates that the positive phase that started last week came to an abrupt end. The sharp and rapid swings have resulted in a mixed outlook and it may take a few days before a clearer picture emerges. Meanwhile, USD could trade in a choppy manner but is likely to stay within a 107.00/109.00 range for now.”
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