FX Strategists at UOB Group noted the greenback remains in a negative phase while USD/JPY could still slip back to the mid-105.00s and 104.96.

24-hour view: “As expected, USD maintained its ‘downside bias’ and traded one yen lower from yesterday’s reference. That said, signs are showing that downside momentum is abating. As such, further declines are unlikely to sustain below 105.10 at least for today. Resistances are expected at 106.25 and 106.50”.

Next 1-3 weeks: ““In our previous report (2-Aug, spot 107.45), we cited a further risk of markets ‘repositioning for a lower USD/JPY going forward’ and that a NY close below 107.00 would warrant a ‘negative phase’ for USD (closing price on Fri: 106.58). Here, price action is likely to stay volatile and should USD drops below 106.00, key support at 105.50 and Jan’s flash crash low of 104.96 would quickly come into focus. On the upside, resistance is expected at 107.10 and only a recovery above 107.90 would indicate that downside pressures on the USD have eased“.