USD/JPY seen well supported in the 108.00 area – UOB

FX Strategists at UOB Group noted the pair remains well supported in the 108.00 region in the near term.

Key Quotes

24-hour view: “We expected a stronger USD yesterday but were of the view that 109.75 is likely out of reach. In line with expectation, USD moved higher but eased off after touching a high of 109.74. Upward momentum has eased and the pull-back from the high has room to extend lower to 108.90 but the next support at 108.60 is unlikely to come into the picture. On the upside, 109.75 is acting as a very strong resistance now (minor resistance is at 109.55)”.

Next 1-3 weeks: “After touching a low of 108.27 last Friday, USD has been trading mostly sideways. While downward momentum is showing early signs of waning, it is too early to expect a low. The outlook for USD is still bearish even though as highlighted in recent updates, the next ‘target’ at 107.30 is unlikely to come into the picture so soon. On a shorter-term note, 108.00 is already a strong support. To put it another way, the current consolidation phase could last for a few days more and only a break of the ‘stop-loss’ at 110.30 (no change in level) would indicate that USD has made an interim low”.