USD/JPY expects a pullback, rangebound within 111.50/115.00 – UOB

FX Strategists at UOB Group said the broad outlook on USD/JPY points to further consolidation, although a retracement is not ruled out in the near term.

Key Quotes

“The post-US election rally in USD is struggling and the odds for further advance appear to be rather slim”.

“Daily MACD is on the verge on crossing into negative territory which suggests that a deeper pull-back is imminent”.

“However, in view of the recent impulsive rally, any down-move is not expected to be ‘significant’.

“From here, the near-term bias is tilted to the downside but any decline is expected to find solid support at 111.50 (last week’s low). On the upside, 115.00 is a major resistance and while a move above this level would not be surprising further out, this level is likely strong enough to cap temporarily for the next one week or so”.