USD/JPY downside is losing momentum – UOB

In opinion of FX Strategists at UOB Group, the downside momentum in USD/JPY appears to have eased somewhat as of late.

Key Quotes

“We expected USD to drift lower to 112.30 before recovering. The low has been 112.44 and the lack of any significant recovery suggests that the immediate pressure is still on the downside. That said, momentum is not strong and from here, a break below 112.00 seems unlikely (minor support at 112.30). Resistance is at 112.85 followed by the stronger level nearer to 113.20”.

“While USD ekedd out a ‘fresh low’ of 112.44 yesterday, downward momentum is patchy at best and we continue to doubt the current decline can extend towards the major 111.65/70 support. That said, only a move back above 113.50 would indicate that the current negative undertone has eased”.