Unclear outlook on USD/JPY, extra rangebound likely – UOB

In view of FX Strategists at UOB Group, the pair retains its neutral bias and is seen extending the sideline theme for the time  being.

Key Quotes

24-hour view: “The strong surge in USD yesterday came as a surprise. The up-move appears to have scope to extend higher even though 111.50 is expected to offer solid resistance. Support is at 110.90 followed by 110.60”.

Next 1-3 weeks: “Our recent expectation for USD to edge lower towards 109.35 is proven wrong as it staged a surprisingly strong rebound and hit an overnight high of 111.31. While the high is below the 111.50 ‘key resistance’, the strong daily closing is enough to indicate that the recent downward pressure has eased. We continue to hold a neutral USD view and after the recent choppy price action, the outlook for the next couple of weeks is unclear. The best call is probably for USD to grind higher but the 112.14 high seen early this month is a solid resistance and the odds for a break of this level are not high. It appears more likely that USD is trading in a broad range for now, probably between 110.30 and 112.20”.