UOB Group’s FX Strategists see USD/JPY grinding lower, while a drop below 114.40 could prompt losses to accelerate in the short-term horizon.

Key Quotes

24-hour view: “We expected USD to ‘trade between 114.75 and 115.25’ yesterday. USD subsequently edged lower to 114.70 before closing on a soft note at 114.74 (-0.23%). Downward momentum has improved, albeit not by much and USD could continue to edge lower. That said, any decline is expected to encounter solid support at 114.40. Resistance is at 114.95 followed by 115.10.”

Next 1-3 weeks: “Our latest narrative was from last Friday (18 Feb, spot at 115.40) where we highlighted that downward momentum has improved but USD has to close below 114.75 before a sustained decline is likely. USD dropped to 114.70 yesterday before closing at 114.74 (-0.23%). Downward momentum has improved slightly and there is room for USD to edge lower. Looking ahead, USD has to break the solid support at 114.40 before a more sustained decline can be expected. The next support is at 114.15. On the upside, a breach of 115.30 (‘strong resistance’ level was at 115.55) would indicate that the current mild downward pressure has eased.”