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In light of the recent performance in USD/JPY, FX Strategists at UOB Group suggested the pair now risks a move lower.

Key Quotes

24-hour view: “USD moved in line with our view of that “a sustained push below the strong support at 109.30 is not expected” with an overnight low of 109.25 followed by a strong rebound to close 109.49. For today, a sideways pattern is expected, between 109.15 and 109.70.”

Next 1-3 weeks: “The breach of 109.45 (low: 109.25) overnight has indicated that the current USD strength has run its course and the risk now shifts to the downside. The next strong support is at 109.15 followed by the big figure 109.00 which is unlikely to come into the picture as yet. On the topside, immediate resistance is in the vicinity of overnight highs at 109.86 and only a further recovery above 110.00 would indicate that the current phase of weakness has ended.”