USD/JPY outlook remains negative – UOB

FX Strategists at UOB Group suggested the pair should need to overcome the 105.70 level in order to mitigate downside pressure.

Key Quotes

“We have been holding the same view since Monday (19 Mar, spot at 105.90) that “a retest of 105.25 seems likely”. USD touched a low of 105.23 in NY yesterday but fear of a trade war sent it plummeting to a low 104.66 early this morning”.

“The rapid drop appears to be running ahead of itself and we are not convinced that the current month-long neutral phase has shifted to bearish”.

“That said, the immediate outlook is clearly ‘negative’ and it is premature to expect a sustained recovery. Only a move back above 105.70 would indicate that the current downward pressure has eased. Until then, USD could continue to probe lower towards the next support at 104.00 but the prospect for a sustained move below this level is not high at this stage”.