USD/JPY still neutral in the short term – UOB

Spot is still seen under pressure in the next 1-3 weeks, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “The swift and strong rebound in USD was unexpected. While the recovery appears to be running ahead of itself, there is scope for extension towards the high earlier this week near 109.80/85. At this stage, a sustained move above this level is not expected (110.00 is another strong level). On the downside, 109.15 is acting as a very strong support. The 108.82 low seen early yesterday is unlikely to come into picture, at least not for today”.

Next 1-3 weeks: “The key short-term resistance at 110.00 continues to hold as USD dropped sharply after touching a high of 109.82 yesterday. As highlighted in recent updates, USD is expected to stay under pressure unless it can reclaim 110.00. While the bias on the downside, 108.55/60 is expected to offer solid support and is unlikely to yield so easily. A clear move below this level would indicate that the year-to-date low at 108.10 would come under threat. On a shorter-term note, the 109.82 high is already a rather strong resistance”.