USD/JPY: Further consolidation on the cards – UOB

There is no change to the neutral stance on USD/JPY in the short-term horizon, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD traded between 106.21 and 106.74 last Friday, narrower than our expected consolidation range of 106.00/06.70. The strong price action after opening this morning has resulted in a quick pick-up in momentum. From here, a break of 107.00 would not be surprising but the next resistance at 107.50 is likely out of reach for today. On the downside, 106.50 is expected to be strong enough to hold any intraday pullback.”

Next 1-3 weeks: “We highlighted last Friday (08 May, spot at 106.35) that USD ‘could continue to consolidate but risk of a break of 106.00 has increased’. USD rebounded and closed on a firm note on Friday (106.65. +0.36%) before extending its gain this morning and is currently approaching a relatively strong resistance at 107.00. Downward pressure has eased and from here, USD is likely still trading within a 106.00/107.50 consolidation range.”