USD/JPY now risks a drop to 106.00 – UOB

USD/JPY still sees a probable move to the 106.00 neighbourhood if 106.70 is cleared in the near-term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD traded between 106.75 and 107.09 yesterday, relatively close to our expected 106.70/107.15 range. While USD could continue to consolidate, the underlying tone has weakened somewhat and this could lead to a lower trading range of 106.60/107.00.”

Next 1-3 weeks: “USD traded in a muted manner for the past several days and the price actions offer no fresh clues. For now, we continue to hold the same view that USD is under mild downward pressure and a daily closing below 106.70 would indicate it could weaken further to 106.00. Only a move above 107.40 (‘strong resistance’ level previously at 107.60) would indicate that the downside risk has dissipated.”