USD/JPY further rangebound likely – UOB

USD/JPY should keep the ongoing sideline theme unchanged for the time being, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Instead of “trading sideways”, USD rose to 108.17 before easing off. The underlying tone appears to be mildly supportive and this could lead to a test of 108.20 first before a deeper pull-back can be expected. For today, the next resistance at 108.45 is unlikely to come into the picture. Support is at 107.75 followed by 107.60”.

Next 1-3 weeks: “USD eased off after touching 108.17 and ended the day slightly higher at 107.92 (+0.09%). The price action is in line with our view from last week (see annotations in chart below) wherein USD is in a “sideway-trading phase”. In other words, we continue to expect USD to trade between the strong levels of 107.00 and 108.20 for a while more. Looking ahead, there is scope for USD to edge above 108.20 but at this stage, the prospect for a sustained advance above the major 108.50 level is not high”.