USD/JPY Downside is Slowing Down – UOB
The research team at UOB Group believes the pair’s downside could run out of steam in the next 1-3 weeks.
Key Quotes
“When
we turned bearish two days ago (see FX Insights on 06 April when spot
was at 110.40), we were of the opinion that we may have seen a bulk of
USD weakness in view of the rapid and extended sharp drop”.
“However, USD
continues with its relentless down-move and touched an overnight low of
107.67. The next significant support is at the middle of the weekly
trading envelope which is at 106.50”.
“Interestingly, this level
coincides with the 38.2% retracement of the rally from 75.31 (Oct 2011)
to 125.85 (Jun 2015). While this is the obvious level to aim for,
short-term momentum are showing early signs of slowing and this coupled
with extreme oversold condition suggests that the odds for move to
106.50 are not very high”.
“All that said, the outlook for USD is
deemed as bearish unless there is a move above the prevailing stop-loss
at 110.10 (109.00 is already a strong short-term resistance)”.
(Market News Provided by FXstreet)
