USD/JPY neutral, momentum is fading – UOB

FX Strategists at UOB Group remain neutral on USD/JPY in the short-term, adding that upside momentum could be running out of steam.

Key Quotes

“USD exceeded the target indicated at 115.95/00 yesterday but reversed quickly after touching a high of 116.12. The sharp decline appears incomplete and the current weakness is expected to extend lower to 114.50”.

“USD extended its gains but the up-move did not have enough momentum to challenge the strong 116.50 resistance indicated yesterday (high of 116.12). The rapid drop from the high suggests that the recent strong upward momentum is waning but at this stage, it is too early to expect a bearish reversal. Overall, there is no change to the current neutral outlook but the short-term upward impetus has waned and this pair is more likely trade sideways for now, likely within a broad 114.00/116.00 range”.