If USD/JPY breaks below 113.40 it could retest the 113.00 neighbourhood in the next weeks, suggest FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the bias for USD is tilted the downside but any weakness is unlikely to break 114.00’. The expected USD weakness exceeded our anticipation USD dropped to 113.94. Downward momentum has improved and USD is likely to weaken further. A break of the support at 113.70 would not be surprising but the next support at 113.40 is unlikely to come under threat. Resistance is at 114.05 followed by 114.20.”

Next 1-3 weeks: “Yesterday (20 Jan, spot at 114.35), we highlighted that the outlook is mixed and USD could trade within a range of 113.70/115.25. There is no change in our view for now even though we did not expect the quick improvement in shorter-term downward momentum. Looking ahead, if USD breaks 113.40, it could lead to a decline to 113.00. At this stage, the chance for USD to break 113.40 is not high but it would increase further as long as USD does not move above 114.45 within these few days.”