USD/JPY downside appears diminished – UOB

A potential test of the 111.65/70 band seems to have run out of downside momentum, suggested FX Strategists at UOB Group.

Key Quotes

“The strong support indicated at 112.70/75 yesterday held as expected as USD rebounded after hitting a low of 112.89. Downward momentum has eased considerably and while a retest of 112.90 would not be surprising, a sustained break below 112.70/75 seems unlikely”.

“USD edged lower to touch 112.89 before rebounding quickly. As indicated yesterday, while the immediate pressure is clearly on the downside, the 111.65/70 low seen in late February appears to be out of reach (minor support at 112.70). All in, only a move back 114.30 would indicate that the current weakness has stabilized (113.90 is already a stronger shorter-term resistance)”.