USD/JPY stays bearish, could test 111.65 – UOB

The pair’s outlook remains negative and there is still room for a test of 111.65 in the short-term horizon, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Against our expectation, USD eased off quickly without testing the strong the 113.00 resistance (high of 112.70). Despite lackluster momentum, the pullback appears to have room to extend lower towards 112.00. The next support at 111.65 is however, likely out of reach. Resistance is at 112.70 followed by the still very strong level of 113.00”.

Next 1-3 weeks: “There is not much to add as we continue to expect USD to move lower and ‘test’ last month’s low of 111.65. This level is acting as a rather strong support and a sustained move below this level seems unlikely for now. Resistance is at 112.70 but only a break above the ‘stop-loss’ at 113.00 would indicate that the current bearish phase has ended”.