USD/JPY: Solid support aligns at 112.50 – UOB

Further decline in USD/JPY is seen meeting firm contention in the mid-112.00s in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade between 113.30 and 114.20’ yesterday was incorrect as it plunged to 112.52 before rebounding strongly. The rebound has room to extend but any advance is likely limited to a test of 113.90 (minor resistance is at 113.70). Support is at 113.05 followed by 112.80).”

Next 1-3 weeks: “We have held the same view since Monday (29 Nov, spot at 113.70) where USD ‘could weaken further but odds for a sustained drop below 112.70 are not high’. USD plunged to 112.52 yesterday before rebounding strongly. Despite the sharp drop, downward momentum has not improved by much. That said, USD could weaken further but 112.50 is expected to offer solid support.  On the upside, a breach of the ‘strong resistance’ level at 114.30 (level previously at 114.65) would indicate that USD is not ready to move below 112.50.”