USD/JPY bearish now, targets 109.50 – UOB

In view of FX Strategists at UOB Group, the outlook on USD/JPY has now shifted to bearish from neutral, eyeing a potential test of the mid-109.00s in the next weeks.

Key Quotes

“The sharp decline in USD to a low ‘fresh low’ of 110.53 and the weak daily close last Friday was unexpected. Downward momentum is improving rapidly and further weakness towards 110.30 is expected (odds for a break below the next support at 110.00 are not high at this stage). Resistance is at 110.85 but only a move back above 111.05 would indicate that the current weakness has stabilized”.

“USD closed at 110.65 in NY last Friday, just a few pips above the key 110.60 support. However, this is enough to indicate that this pair has moved into a bearish phase again. The immediate target is for a move to the rising trend-line support at 109.50. Those looking to enter short may like to wait for a bounce to 110.85. Stop-loss is placed at 111.50”.