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USD/JPY faces increasing risks of a move below the 106.00 mark in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD traded between 105.98 and 106.65 before ending the day slightly higher at 106.27 (+0.12%). The relatively quiet price action offers no fresh clues and for today, USD could continue to consolidate, likely between 106.00 and 106.70.”

Next 1-3 weeks: “USD tested the bottom of our expected 106.00/107.50 range (first indicated on Monday, 04 May) over the past two days. While the failure to break clearly below this level was not surprising, the underlying tone has weakened. As highlighted on Monday, USD has to close below 106.00 before a sustained weakness can be expected. Meanwhile, USD could continue to consolidate but the risk of a break of 106.00 has increased.”