Further consolidation in USD/JPY stays well in the pipeline for USD/JPY, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted last Friday that USD ‘could drift lower to 109.80’. We added, ‘the next support at 109.60 is unlikely to come under threat’. However, USD rose to 110.26 before dropping back down to 109.77. Downward momentum is beginning to build and the bias for today is on the downside. A break of 109.60 would not be surprising but the next major support at 109.30 is likely out of reach. Resistance is at 109.95 followed by 110.10.”
Next 1-3 weeks: “On 19 Aug, when USD was trading at 109.90, we highlighted that USD could trade within a 109.30/110.55 range for a period of time. Our view was not wrong as USD traded within the expected range for more than a week now. While shorter-term downward momentum is showing tentative signs of improving, at this stage, it is too early to expect USD to break below bottom of the expected range at 109.30. In other words, we continue to expect USD to trade between 109.30 and 110.55 for now.”
