USD/JPY recovery could test 113.70 – UOB
FX Strategists at UOB Group see there is scope for the pair to move higher to the 113.70 area in the near term.
“We indicated yesterday that USD is likely to ‘retest the low near 112.90 but a sustained move below this level is not expected’. In line with expectation, USD briefly touched 112.85 before rebounding strongly. The recent downward pressure has eased and the recovery from the low has scope to extend higher to 113.70 (next resistance at 113.95 unlikely to come into the picture for now). Support is at 113.15, ahead of the 112.85 low”.
“While we warned of the increased risk of an interim top yesterday, the pace and extent of the USD decline was unexpected (the 0.69% decline is the largest single-day drop in more than a month). The bullish phase that started on 20 Jun (spot at 111.65) has ended with the break of 113.40 (low has been 112.90). USD has likely just moved into a consolidation phase and is expected to trade within a broad 112.00/114.20 range for now even though the immediate bias is tilted to the downside”.
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