USD/JPY downside risks alleviated above 106.20 – UOB

In view of analysts at UOB Group, a climb above 106.20 could mitigate the current downside pressure in USD/JPY.

Key Quotes

“The pull-back from the 107.47 high late last week has been more resilient than expected and is currently approaching the strong 104.50 support. We were of the view that 104.50 is the lower end of an expected 104.50/107.50 consolidation range but the pace of the drop has increased the risk of a deeper pull-back”.

“However, only a clear move below 104.50 would indicate an extension towards 103.50 has started. Overall, the shorter-term outlook has deteriorated considerably and the downward pressure would continue to grow unless USD can move and stay above 106.20 in the next few days (the high 105.85/90 seen after NY closing is already a strong resistance)”.