USD/JPY faces extra consolidation near term – UOB

USD/JPY is now expected to trade within the 135.20-138.00 range in the short term, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “The sharp but short-lived drop in USD to 135.80 and the subsequent robust rebound came as a surprise (we were expecting USD to consolidate). The volatile price actions have resulted in a mixed outlook. For today, USD could trade in a choppy manner, likely within a broad range of 135.70/137.60.”

Next 1-3 weeks: “Our view for USD to advance to 138.30 was invalidated as it dropped below our ‘strong support’ level of 136.40 yesterday (low of 135.80). The subsequent strong bounce from the low has resulted in a mixed outlook. Further choppy price actions are not ruled out. In view of the whippy price actions, USD could trade within a broad range of 135.20/138.00 for now.”