Strong support for USD/JPY has emerged in 104.40 region, in light of the recent price action, as analysis by strategists at UOB Group.
24-hour timeframe: “USD traded between 105.58 and 106.16, narrower than our expected 105.50/106.50 range. Momentum indicators are still ‘flat’ and USD is expected to continue to trade sideways, likely between 105.40 and 106.10”.
Next 1-3 weeks’ view: “After USD opened sharply lower and plunged yesterday, we indicated that “further decline is not ruled”. But in our view, “it is left to be seen if USD has enough momentum to challenge 104.00”. it means that if USD rebounded from 104.44 and exceeded our strong resistance at 106.20, so the fleeting nature of the decline came as a surprise. The breach of the strong resistance shows that our view was incorrect. A mixed outlook and trading of USD within a broad of 105.00 and 107.00 are caused by the price action.