UOB Group’s FX Strategists cited the likelihood of greater declines in USD/JPY may want to be going for walks out of steam.
24-hour view: “Our expectation for USD to ‘test the 103.70 support’ used to be improper as it rebounded strongly after touching 103.81. The quite uneven charge moves have resulted in a combined outlook. USD may want to proceed to change in a uneven manner, albeit possibly inside a greater vary of 104.00/104.50.”
Next 1-3 weeks: “We highlighted the day gone by that ‘downward momentum is commencing to enhance however USD has to shut beneath 103.50 in order to point out that it is equipped to handle the month-to-date low at 103.18’. We added, ‘the odds for such a go show up to be pretty excessive as lengthy as USD does no longer pass above 104.50 inside these 1 to two days’. USD dropped to a low of 103.81 earlier than staging a distinctly sharp rebound (overnight excessive of 104.40). There is no exchange in our view for now however until USD can remain under 104.00 inside these 1 to two days, the odds for in addition weak spot would decrease quickly.”