USD/JPY risks extra pullbacks near term – UOB

USD/JPY does not rule out a move to the 110.00 area in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘despite the relatively sharp decline, downward momentum has not improved by all that much but there is room for USD to edge lower to 110.30’. Our expectation did not materialize as USD recovered after touching 110.38 and subsequently traded sideways. The underlying tone still appears to be a tad soft and we continue to see chance for USD to edge lower but a clear break of 110.30 is unlikely (next support is at 110.05). Resistance is at 110.80 followed by 111.00.”

Next 1-3 weeks: “We continue to hold the same view as from yesterday (07 Jul, spot at 110.55). As highlighted USD is under mild downward pressure and could grind lower to 110.05. At this stage, the odds for a clear break of 110.05 are not high. On the upside, a breach of 111.15 would indicate that the current mild downward pressure has eased.”