Further decline remains on the cards for USD/JPY in case 114.40 is cleared in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘the rapid rebound appears to be running ahead of itself and USD is unlikely to strengthen much further’ and we expected USD to ‘trade within a range of 114.70/115.30’. USD subsequently traded within a narrower range than expected (114.90/115.19). The underlying tone has weakened somewhat and USD is likely to edge lower even though it is unlikely to challenge the major support at 114.40 (114.70 is already quite a strong level). Resistance is at 115.15 followed by 115.30.”

Next 1-3 weeks: “Our narrative from two days ago (22 Feb, spot at 114.75) still stands. As highlighted, downward momentum has improved slightly and there is room for USD to edge lower but it has to break 114.40 before a more sustained decline can be expected. Only a breach of 115.30 (no change in ‘strong resistance’ level) would indicate the current mild downward pressure has eased.”