USD/JPY still neutral, focus remains on 105.20 – UOB

The pair’s stance could shift to bearish on a daily close below 105.20, reiterated FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD rebounded strongly without testing the strong 105.25 support. The recovery from a low of 105.43 appears to have enough momentum to stage another push higher towards 106.50. At this stage, a clear break above this level is not expected (there is another strong resistance at 106.70). Support is at 105.80 followed by 105.45”.

Next 1-3 weeks: “we highlighted that the prospect for USD to enter a bearish has diminished but remains intact unless it can reclaim the strong 106.70 resistance. USD touched a high of 106.46 during Asian hour yesterday but plummeted after NY close on the back of news of Cohn’s resignation. While the undertone has clearly weakened, it is too early to expect the start of a sustained decline. Only a NY close below 105.20 would indicate that a move towards 104.50, 104.00 has started. Overall, after the sharp drop early this morning, USD is expected to stay under pressure (at least for the next few days) unless it can move and stay above the high near 106.45 yesterday”.