In view of FX Strategists at UOB Group, there is still room for the pair to re-visit the 105.25 level in the next weeks.
24-hour view: “Expectation for USD to trade sideways yesterday was wrong as it rose to hit a high of 106.60. The up-move appears to be running ahead of itself but a ‘test’ of the strong 106.80 resistance is not ruled out. At this stage, a sustained move above this level seems unlikely (next resistance is at 107.30). On the downside, yesterday’s low near 105.90 is expected to be strong enough to hold any intraday pullback (minor support is at 106.20)”.
Next 1-3 weeks: “In the update on Monday (19 Mar, spot at 105.90), we were of the view that despite the lack of downward momentum, the weakened undertone suggests that a retest of the month-to-date low near 105.25 seems likely. The relatively strong recovery yesterday was not exactly expected and the odds for a move towards 105.25 have diminished. However, only a move back above 106.80 would indicate that the current mild downward pressure has eased. That said, a break of 106.80 is not going to change the current neutral outlook but would suggest that USD has moved into sideway consolidation range”.
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