USD/JPY could drop to 111.30 – UOB

In view of FX Strategists at UOB Group, the pair could slip back towards the 111.30 region in the near term.

Key Quotes

“The anticipated USD weakness exceeded our expectation by taking out the major 112.00 support to hit a multi-week low of 111.60. The decline appears incomplete and barring a move back above 112.50, another leg lower towards 111.30 seems likely”.

“While we held the view that the improved downward momentum could lead to a ‘grudging’ move lower towards 111.30, the ease of which the major 112.00 support was taken out came as a surprise (low of 111.60 so far). With no signs of stabilization just yet, we continue to expect a move to 111.30 where a break could lead to further weakness towards 110.00. Only a move above the short-term key resistance at 112.90 would indicate that the immediate downward pressure has eased”.