USD/JPY does not rule out a test of 107.50 – UOB

According to FX Strategists at UOB Group, USD/JPY carries the potential to re-visit the mid-107.00s in the near term.

Key Quotes

24-hour view: “Expectation for USD to “extend lower to 107.75” was incorrect as it rebounded strongly after touching 107.87. Downward pressure has dissipated and the current movement is viewed as part of a consolidation phase. In other words, USD is expected to trade sideways, likely between 108.00 and 108.40”.

Next 1-3 weeks: “There is not much to add to the update from last Friday (01 Nov, spot at 108.05). As highlighted, the risk has shifted to the downside and USD “could trade lower towards 107.50”. Only a move above 108.60 (no change in ‘strong resistance’ level) would indicate that our view is wrong”.