USD/JPY picks up downside momentum – UOB

FX Strategists at UOB Group noted USD/JPY seems to be accelerating the downtrend, with the focus of attention now on the 106.70 level.

Key Quotes

24-hour view: “Instead of ‘consolidating between 107.25 and 107.95’, USD dipped to 106.97 before recovering quickly. The rapid rebound appears to have scope to extend higher but any advance is viewed as part of a 107.00/107.60 range (a sustained rise beyond 107.60 is unlikely).”

Next 1-3 weeks: “USD dipped a few pips below our expected 107.00/109.00 range (low of 106.97) before rebounding. While downward momentum is beginning to pick-up, it is too early to expect a sustained decline in USD. Only a NY closing below 106.70 would indicate that USD is ready to move to 106.00. For now, the prospect for such a scenario is not high but it would continue to increase unless USD moves back above 107.80 within these few days.”