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FX Strategists at UOB Group see USD/JPY keeping the downtrend unchanged and trading within the 103.70-105.00 range in the near-term.

Key Quotes

24-hour view: “Our expectation for USD to ‘trade sideways’ was incorrect as it surged to a high of 105.34 before plunging back down to a low of 104.13. The underlying tone appears to be soft and there is chance for USD to test the solid support at 104.00. For today, a sustained decline below this level is unlikely (next support is at 103.70). Resistance is at 104.70 followed by 105.00.”

Next 1-3 weeks: “Our latest narrative was from Monday (02 Nov, spot at 104.70) wherein ‘a break of 104.00 is not ruled out just yet but USD has to move and stay below 104.50 within these few days’. USD soared and cracked our ‘strong resistance’ at 105.00 yesterday (high of 105.34) before dropping back down again. While the volatile price actions have clouded the outlook, shorter-term downward momentum still suggests that 104.00 is at risk. That said, the next support at 103.70 is unlikely to come into the picture anytime soon. All in, USD is expected to trade with a downward bias but any weakness is viewed as a lower trading range of 103.70/105.00.”