USD/JPY: Scope for a move to 107.30 – UOB

USD/JPY could slip back to the 107.30 region in the next weeks, comment FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to weaken last Friday but we were of the view that ‘the major support at 107.65 is unlikely to come under threat’. However, USD plummeted to 107.45 before snapping back up to close little changed for the day (107.91, -0.05%). The sharp and rapid swings have resulted in a mixed outlook. For today, USD could trade between 107.50 and 108.20.”

Next 1-3 weeks: “Our latest narrative was from last Tuesday (20 Apr, spot at 108.15) where we highlighted that ‘further USD weakness is likely but 107.65 may not come into the picture so soon’. After trading in a quiet manner for a few days, USD plunged through 107.65 on Friday. However, the decline was short-lived as it rebounded quickly from 107.46. While shorter-term outlook is mixed, the current weak phase in USD that started about 3 weeks ago is still intact. Only a break of 108.40 (‘strong resistance level previously at 108.55) would indicate that the weak phase has run its course. Until then, there is chance for USD to move lower to 107.30. The prospect for the weakness to extend to 107.00 is not high for now.”