In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further decline in USD/JPY should meet the next relevant contention around 129.80 in the short term.

24-hour view: “Our view for USD to trade sideways was incorrect as it plunged to 130.52 before rebounding to close at 131.31 (-0.36%). The rapid decline is oversold but with no sign of stabilization yet, USD is likely to test the major support at 130.45. A sustained drop below this level is unlikely today (next support is at 130.00). On the upside, a breach of 132.00 (minor resistance is at 131.60) would suggest the weakness in USD has stabilized.”

Next 1-3 weeks: “Yesterday (20 Mar, spot at 132.40), we noted that the outlook for USD is still negative but we were of the view that it ‘has to break and stay below 131.50 before a move towards the next support at 130.45 is likely’. We did anticipate the sharp drop as USD plummeted to 130.52 in London trade. Further USD weakness appears likely. A break of 130.45 would not be surprising. The next major support is at 129.80. On the upside, a breach of 132.60 (‘strong resistance’ was at 133.80 yesterday would indicate that the USD weakness that started early last week (see annotations in the chart below) has come to an end.”