USD/JPY could drop back to the mid-109.00s in the coming weeks, according to UOB Group FX Strategists.
Observation for 24 hours: “We said yesterday that the dollar ‘might hit 110.75 first before a decline can be expected.’ USD then increased to 110.69 before plummeting to 109.92, a stunning decline. Although the quick slide has capacity to go lower, oversold conditions indicate that the major support around 109.50 is out of reach (there is another support at 109.70). The resistance level is 110.10, which is followed by 110.30.”
Within the next 1-3 weeks: “Our most recent story was published yesterday (14 July, spot at 110.55), in which we predicted that USD would ‘move between 110.00 and 111.15 for a period of time.’ We hadn’t expected the USD to tumble below 110.00 in such a short period of time. The USD is projected to trade with a downward tilt around 109.50 as short-term bearish momentum improves. At this point, the chances of a sustained drop below this level are slim. As long as the’strong resistance’ at 110.55 is not exceeded, the current mild downward pressure is considered intact.”/n
