USD/JPY scope for a retracement to 114.00 – UOB

USD/JPY could grind lower towards the 114.00 area in the next 1-3 weeks, according to FX Strategists at UOB Group.

Key Quotes

“USD broke below the expected 115.50/118.50 range (low of 115.08) earlier but we are not convinced that the current weakness can be sustained”.

“The price action is more akin to a deep corrective pull-back instead of the start of a major bearish reversal. That said, the short-term pressure is on the downside and there is scope for further weakness to 114.00 (though we do not attach a high probability for such a move)”.

“Only a move back above 116.80 would indicate that the current weakness has stabilized (minor resistance at 116.20)”.