USD/JPY risks further weakness in the near term – UOB

Further selling bias in USD/JPY appears in the pipeline for the time being, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “USD dropped to 133.49 yesterday and then rebounded. The rebound in deeply oversold conditions suggests that USD is unlikely to weaken much further. To look at it another way, after dropping sharply the past few days, today, USD is likely to take a breather and trade in range, expected to be between 133.40 and 135.00.”

Next 1-3 weeks: “After rising close to the March high of 137.91, USD staged a swift drop as it plummeted and closed lower for the third straight day yesterday. While USD could continue to decline, short-term conditions are severely oversold and it left to be seen if USD has enough momentum to break the solid support level near 133.00. However, the downside risk is intact as long as USD stays below 136.05 (‘strong resistance’ level).”