USD/JPY risks a probable drop to 135.00 – UOB

Further downside pressure carries the potential to drag USD/JPY to the 135.00 area in the short-term horizon, note FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “USD closed at 136.55 before breaching the 136.00 support during early Asian hours. The boost in downward momentum suggests USD could break the major support at 135.55. The next support at 135.00 is likely out of reach for now. Resistance is at 136.25 followed by 136.55.”

Next 1-3 weeks: “USD dropped sharply during early Asian hours. Shorter-term downward momentum has improved rapidly and the risk for USD is tilted to the downside towards 135.00. The downside risk is intact as long as USD does not move above the current ‘strong resistance’ level at 137.00.”