USD/JPY still under pressure below 110.00 – UOB

According to FX Strategists at UOB Group, the pair is expected to remain under pressure as long as 110.00 remains untested.

Key Quotes

24-hour view: “The unexpected strong rebound in USD appears to be running ahead of itself. That said, there is scope for extension to 110.00 even though a sustained move above this level seems unlikely (next resistance is at 110.20). On the downside, support is at 109.30 but only a move back below 109.05 would indicate that the immediate upward pressure has eased”.

Next 1-3 week: “The strong rebound from the support near 108.55/60 came as a surprise (this level was tested last Friday and on Monday but held both times). While the risk for further weakness has diminished, only a move back above 110.00 would indicate that the immediate downward pressure has eased. Until then, another attempt to challenge 108.55/60 is not ruled out just yet (even though this level is expected to continue to offer solid support). A move back above 110.00 would not change the current neutral outlook but USD is then expected to trade in a broad sideway consolidation range”.