USD/JPY bearish, eyes on 107.30 – UOB

FX Strategists at UOB Group remain bearish on the pair, expecting the next target to come at 107.30 in the next weeks.

Key Quotes

24-hour view: “Expectation for a stronger recovery was wrong as USD dropped sharply after touching a high of 109.76. The decline hit a low of 108.27 before rebounding quickly. Despite the recovery, the undertone is still weak and a ‘retest’ of the low seems likely. That said, the next support at 108.00 is a major level and is unlikely to come under threat, at least not for today. Resistance is at 109.30 ahead of 109.75”.

Next 1-3 weeks: “Despite hitting a ‘fresh’ low of 108.27 last Friday, downward momentum is not as impulsive as preferred and we continue to hold the view that the next ‘target’ at 107.30 is unlikely to come into the picture so soon. On a shorter-term note, 108.00 is a strong support and this level could hold out for a few more days. In other words, USD could trade sideways at these lower levels first before staging the next ‘leg’ lower towards 107.30. ‘Stop-loss’ for the bearish view is unchanged at 110.30 for now”.