USD/JPY still poised for a test of 99.50 – UOB

The research team at UOB Group still expects USD/JPY to slip back to the mid-99.00s in the next weeks.

Key Quotes

“Instead of trading sideways as expected, USD broke below the 100.50 support and dropped to an overnight low of 100.22. While downward momentum is not that strong, the current decline appears to have scope to extend further. From here, allow for a bounce to 100.50 but 100.85 is expected to cap for a move lower to last week’s low near 100.05/10. A break below this strong support would open up the way for a deeper down-move but the next major support at 100.50 is likely out of reach”.

“We continue to hold a bearish USD view and expect further extension to 99.50/55 despite the current severely oversold conditions. Only a move back above 101.50 would indicate that a short-term low is in place”.