USD/JPY keeps the focus on the 106.70 region – UOB

USD/JPY’s outlook remains tilted to the negative side, while the pair remains focused on the 106.70 region in the near-term, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for a stronger rebound did not materialize as USD traded in a quiet manner between 106.98 and 107.57 before ending the day little changed at 107.31 (-0.03%). The current movement is viewed as an on-going consolidation phase. In other words, USD could continue to trade sideways for now, likely between 107.00 and 107.70.”

Next 103 weeks: “Last Thursday (11 Jun, spot at 107.05), we held the view that the outlook for USD ‘is mildly negative’. We indicated that USD has to ‘close below 106.70 before a sustained decline can be expected’. While USD subsequently dropped to 106.56, it did not close below 106.70. Despite the strong rebound last Friday, the risk for further USD weakness is still intact. Only a move above 108.00 (no change in ‘strong resistance’ level) would indicate the current mild downward pressure has eased. In other words, we continue to hold the same view from last Thursday.”