USD/JPY: A drop to 133.00 loses traction – UOB

The probability that USD/JPY could slip back to the 133.00 region appears not favoured for the time being, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We noted yesterday ‘the price movements appear to be consolidative’ and we expected USD to ‘trade sideways in a range of 134.55/135.55’. USD traded sideways as expected albeit in a narrower range of 134.71/135.35. Further sideways trading appear likely, expected to be between 134.70 and 135.55.”

Next 1-3 weeks: “Our update from yesterday (09 May, spot at 135.10) still stands. As highlighted, after plummeting to a low of 133.49 last Friday, USD has not been able to make further headway on the downside. The odds for USD to weaken further to 133.00 have diminished. However, only a breach of 135.85 (no change in ‘strong resistance’ level from yesterday) would suggest that the weakness in USD has stabilized.”