USD/JPY bearish, now targets 108.70 – UOB

FX Strategists at UOB Group have shifted their stance on the pair to bearish from neutral, now expecting a test of the 108.70 region.

Key Quotes

“We underestimated the weakness in USD as it sliced through the major 110.00 support and plunged to a low of 109.20. The decline appears to be running ahead of itself but another push lower towards 109.00 would not be surprising (next support at 108.70)”.

“The call ”to wait for a NY closing below 110.00 before adopting a bearish stance” was ill-timed as USD sliced through 110.00 and plunged to an overnight low of 109.20. The outlook is clearly bearish with an immediate target of 108.70. That said, current level of 109.50 offers unattractive reward to risk ratio and those looking to sell may likely to wait for a bounce to 109.95/00. Stop-loss is placed at 110.50”.