USD/JPY neutral near term, faces extra consolidation – UOB

The pair faces a continuation of a consolidative theme in the near term, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected to USD to test last month’s 108.27 low but were of the view that the major 108.00 support is unlikely to be challenged. USD dipped briefly to a low of 108.03 on Friday before rebounding strongly. Downward momentum has eased but it is too early to expect a sustained up-move. USD is more likely to consolidate and trade sideways from here. Expected range for today; 108.35/109.15”.

Next 1-3 weeks: “USD touched a low of 108.03 last Friday, holding just a few pips above the bottom of the expected 108.00/110.50 consolidation range. The subsequent sharp rebound from the low reinforces our current neutral outlook for USD even though the undertone has weakened somewhat. That said, USD has to move clearly below 108.00 to indicate the start of a sustained down-move”.