USD/JPY oversold but could test 99.50 – UOB

The research team at UOB Group sees the likeliness of USD/JPY testing the mid-99.00s in the near term, despite the its oversold condition.

Key Quotes

“As highlighted last Friday, any rebound in USD is expected to encounter strong resistance at 101.30. USD touched a high of 101.24 and the subsequent sideway trading is likely part of a consolidation phase. In other words, further range trading is expected for today, likely within a 100.50/101.30 range”.

“The current movement is deemed as a short-term consolidation phase that may last for another couple of days. As long as 101.50 is not taken out, another leg lower towards the major 99.50 support cannot be ruled out just yet. That said, based on the oversold conditions, a clear break below this level seems unlikely”.