USD/JPY: Further weakness appears likely below 129.60 – UOB

USD/JPY could see its losses pick up pace once 129.60 is breached, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to trade in a range of 130.20/131.40 yesterday. However, USD rose to a high of 131.76 before easing off. The advance lacks momentum and USD is unlikely to strengthen further. Today, USD is more likely to edge lower to 130.60, possibly testing the support at 130.20. Resistance is at 131.55, followed by 131.75.”

Next 1-3 weeks: “We have expected USD to weaken since the middle of last week. After USD dropped to 129.67 and rebounded strongly, in our latest update from yesterday (27 Mar, spot at 130.70), we indicated ‘Further USD weakness is not ruled out but USD has to break and stay below 129.60 before further decline is likely’. We continue to hold the same view. Overall, only a break of 132.00 (no change in ‘strong resistance’ from yesterday) would indicate that USD is not declining further.”