USD/JPY is still forecast to maintain the consolidation between the 109.20/110.60 band in the next weeks, commented FX Strategists at UOB Group.
Key Quotes
24-hour view: “The sharp drop in USD to 109.57 came as a surprise (we were expecting sideway-trading). The rapid decline appears to be overdone and USD is unlikely to weaken much further. For today, USD is more likely to consolidate and trade between 109.50 and 110.10.”
Next 1-3 weeks: “On Tuesday (26 Jul, spot at 110.55), we highlighted that ‘upward momentum is beginning to improve but USD has close above 110.90 before a sustained advance can be expected’. We added, ‘the prospect for USD to close above 110.90 is not high for now but it would remain intact as long as USD does not move below 109.90 within these few days’. The build-up in momentum fizzled out quickly as USD dropped sharply to 109.57 yesterday (27 Jul). The recent price actions have resulted in a mixed outlook and USD could trade within a 109.20/110.60 range for now.”
