USD/JPY stays neutral, likely in a 108.00/110.50 range – UOB

FX Strategists at UOB Group expects the pair to continue within a consolidative theme between 108.00 and 110.50 in the next weeks.

Key Quotes

24-hour view: “USD dropped to a low of 108.43 before rebounding strongly. The recovery appears to have some room left to extend higher but a move beyond 110.25 is not expected (110.00 is already quite a strong resistance). Support is at 109.10 followed by 108.85. Yesterday’s low near 108.45 is not expected to come into the picture for now”.

Next 1-3 weeks: “We turned neutral on JPY yesterday and the subsequent rapid drop from a high of 110.29 came as surprise. Instead of extending its recovery to 110.80 as expected previously, USD has likely moved into a choppy and broad consolidation range. In other words, there is no change to the neutral outlook but USD is expected to trade sideways from here, likely within a broad 108.00/110.50 range”.