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USD/JPY remains bearish but a move to 103.00 looks unlikely in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that there is chance for USD to ‘test the solid support at 104.00’. We added, ‘a sustained decline below this level is unlikely’. While we got the direction of the price action right, we did not quite anticipate the reaction upon the break of 104.00 as USD plunged to a low of 103.43 before closing 103.47, its lowest daily closing since March. The sharp and rapid decline appears to be overdone and further sustained weakness appears unlikely. From here, USD could dip to 103.30 but the odds for a break of the next support at 103.00 are not high. Resistance is at 104.00 followed by 104.30.”

Next 1-3 weeks: “We highlighted yesterday (05 Nov, spot at 104.40) that ‘while the volatile price actions have clouded the outlook, shorter-term downward momentum still suggests that 104.00 is at risk’ and we expected ‘any weakness to be part of a lower trading range of 103.70/105.00’. USD subsequently cracked both 104.00 and 103.70 and plunged to a low of 103.47. The surge in downward momentum suggests USD is likely to weaken further even though the next major support at 103.00 may not come into the picture so soon. On the upside, a break of 104.60 would indicate that USD is not ready for 103.00. On a shorter-term note, 104.30 is already a strong level.”