USD/JPY downside appears limited – UOB

In opinion of FX Strategists at UOB Group, the pair’s downside momentum seems to have ebbed for the time being.

Key Quotes

“Despite the generally negative undertone, USD tried but failed to move clearly below the major 112.50 support. The rapid and sharp bounce from a low of 112.49 yesterday suggests that the recent weakness is stabilizing”.

“However, it is too early to expect a sustained up-move especially when there is a major resistance at 114.80 (declining trend-line). At the least, USD has to move and stay above 114.20 or the risk of a drop below 112.50 is still intact even though the odds for such a move have diminished somewhat”.

“A clear break below 112.50 could lead to acceleration lower towards 111.50”.