USD/JPY: Short-term bottom in place? – UOB

In opinion of FX Strategists at UOB Group, USD/JPY could have charted an interim bottom around the 107.00 region.

Key Quotes

24-hour view: “Our view from yesterday was that the recovery in USD ‘has room to extend to 108.10’. USD subsequently rose to 108.09 before ending the day on a firm note at 107.90 (+0.69%). Upward momentum has picked up and from here, USD could extend its gain but the strong resistance at 108.75 could be out of reach for today (minor resistance is at 108.40). Support is at 107.60 followed by 107.30. The 107.00 low from yesterday is acting as a solid support now.”

Next 1-3 weeks: “We highlighted on Tuesday (01 Apr, spot at 107.45) that while USD ‘is still weak’, the major support at ‘105.90 may be out of reach this time round’. While USD has since rebounded, only a break of 108.75 (‘strong resistance’ level previously at 109.00) would indicate that the current downward pressure has eased. From here, unless USD were to move and stay below 107.30 within these 1 to 2 days, a breach of the ‘strong resistance’ level would not be surprising. In other words, the risk of a short-term bottom has increased.”