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USD/JPY risks a move below the 104.00 level as long as it does not break above 105.00 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD closed little changed at 104.64 (+0.03%) last Friday. While the underlying tone has firmed somewhat, any advance from here is viewed as part of a higher trading range of 104.50/105.00. In other words, a clear break of 105.00 is not expected.”

Next 1-3 weeks: “There is not much to add to our update from last Thursday (29 Oct, spot at 104.35). As highlighted, ‘downward momentum has improved albeit not by much’. We added, ‘the risk of a break of 104.00 has increased and would continue to increase as long as USD does not move above 105.00’. While USD subsequently dropped to a low of 104.01, it has not been able to make much headway on the downside. From here, a break of 104.00 is not ruled out just yet but in order to rejuvenate the current flagging downward momentum, USD has to move and stay below 104.50 these few days or a break of 105.00 would indicate that USD is not ready to move below 104.00.”