USD/JPY bearish below 112.50 – UOB

In opinion of FX Strategists at UOB Group, the pair’s stance should shift to bearish on a close below 112.50.

Key Quotes

“While we highlighted the vulnerability of USD yesterday and held the view that the immediate pressure is on the downside towards 112.50, the sharp and rapid drop to a low of 112.04 came as a surprise”.

“The immediate pressure is still clearly on the downside but at this stage, it is unclear if the current weakness could be sustained (especially with the strong bounce from the low)”.

“Only a daily closing below 112.50 would indicate that a move towards 111.30 has started. The odds for such a move appear to be quite high unless USD can reclaim 113.95 within these 1 to 2 days”.