USD/JPY bearish on a close below 110.00 – UOB

In view of FX Strategists at UOB Group, the pair’s outlook should shift to bearish on a daily close below the 110.00 handle.

Key Quotes

“The relatively sharp decline in USD yesterday dipped below our previously expected 110.20/112.20 neutral consolidation range (low of 110.07 at time of writing)”.

“The break of the 110.20 support coupled with the weak daily closing in NY has shifted the immediate pressure to the downside. However, only a NY closing below the rising weekly trend-line at 110.00 would indicate the start of a fresh bearish phase”.

“A clear break of this strong and critical mid to long-term support level could lead to a rapid drop towards 109.10 (immediate ‘target’), possibly extending all the way to 107.30. The odds for such a move are not that high at this stage but would continue to improve unless USD can reclaim 111.15 in the next few days”.