USD/JPY unlikely to extend the drop below 102.70 – UOB

A move below 112.70 in USD/JPY appears not favoured for the time being, noted UOB Group’s FX Strategists.

Key Quotes

24-hour view: “We expected USD to ‘consolidate and trade between 113.20 and 114.10’ yesterday. However, USD dipped briefly to 112.97 before rebounding. We continue to view the price actions as part of a consolidation and expect USD to trade between 113.30 and 114.20 for today.”

Next 1-3 weeks: “Our view from yesterday (29 Nov, spot at 113.70) still stands. As highlighted, while USD could weaken further, the odds for a sustained drop below 112.70 are not high for now. On the upside, the ‘strong resistance’ level (currently at 114.65) is likely to cap any recovery, at least within these few days.”