USD/JPY under pressure, bearish on a close below 110.00 – UOB

In view of FX Strategists at UOB Group, the outlook on USD/JPY should shift to bearish from neutral on a NY close below the key 110.00 handle.

Key Quotes

“Instead of extending lower to 110.00, USD traded mostly sideways yesterday within a 110.20/110.72 range. Despite the quiet consolidation, the undertone for this pair still appears weak. From here, barring a move above 110.75, USD is expected to move below 110.00”.

“USD just moved below 110.00 at the time of writing. As highlighted yesterday, we prefer to wait for a NY closing below 110.00 before adopting a bearish stance. This scenario appears to be likely unless USD can reclaim 110.80 within these 1 to 2 days. Looking further ahead, a move into a bearish phase would have 108.70 as an immediate target”.