USD/JPY could test 108.20 – UOB

According to analysts at UOB Group, USD/JPY could extend its correction to the 108.20 area in the near term.

Key Quotes

“The expectation for USD to move higher to 111.85/90 was proven wrong quickly as the sharp drop yesterday took out the stop-loss at 110.00 (rising trend-line support)”.

“Shorter-term downward momentum is very strong and from here, the current pull-back appears to have scope to extend lower to 108.20”.

“However, we view the current USD decline as a correction (note that daily MACD is still in positive territory) and do not expect the 105.50/55 low in May to come into the picture, at least not for the next few weeks. Overall, this pair is expected to remain under pressure unless it can reclaim 110.50”.