USD/JPY: Further upside not favoured – UOB

Extra gains in USD/JPY seem to have lost momentum for the time being and some consolidation could now turn up within the 110.30/111.70 range, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘could edge lower and test 110.80 first before the risk of a rebound would increase’. USD subsequently dropped to 110.81 before settling at 110.87 (-0.16%). While there is no sign of a rebound, further USD weakness is unlikely. From here, USD is more likely to trade sideways between 110.80 and 111.25.”

Next 1-3 weeks: “We continue to hold the same view as from yesterday (04 Oct, spot at 111.00). As highlighted, the recent USD strength has come to an end. The current movement is viewed as the early stages of a consolidation phase and USD is likely trade between 110.30 and 111.70 for now.”