USD/JPY attention is now on 110.00 – UOB

FX Strategists at UOB Group noted the pair remains under pressure unless it can reclaim the 110.00 area.

Key Quotes

24-hour view: “The anticipated USD weakness greatly exceeded our expectation by dropping to a low of 108.58. The subsequent sharp rebound from the low came as a surprise as well. While 108.58 is likely a short-term low, the rebound appears to be running ahead of itself and further sustained USD strength is not expected. This pair is more likely to trade sideways for now, likely between 109.00 and 109.80”.

Next 1-3 weeks: “USD took out the low end of the previously expected 109.20/111.05 consolidation range with a low of 108.58 last Friday but the decline was not sustained. Despite the sharp bounce from the low, short-term downward pressure has shifted to the downside even though any weakness from here is expected to encounter solid support at 108.55/60 followed by the year-to-date low near 108.10. At this stage, the odds for a move below these levels are not high but would increase unless USD can reclaim 110.00 in the coming days”.