USD/JPY bearish on a close below 108.10 – UOB

FX Strategists at UOB Group noted the pair’s outlook should shift to bearish on a daily close below 108.10.

Key Quotes

24-hour view: “The unexpected sharp decline in USD appears incomplete and the year-to-date low near 108.10 is likely to be tested (minor support at 108.25). A break of 108.10 could lead to further rapid drop to 107.70. Resistance 108.90 but only a move back above 109.25 would indicate that the current weakness has stabilized”.

Next 1-3 weeks: “The sharp decline in USD yesterday has shifted the immediate pressure to the downside. However, only a clear break below the year-to-date low near 108.10 would indicate that USD has moved into a bearish phase. This scenario would not be surprising unless USD can reclaim 109.55 within these few days. On a shorter-term note, 109.25 is already a strong resistance. A shift to a bearish phase would have an immediate target of 107.40”.