USD/JPY faces further consolidation – UOB

The pair remains poised for a continuation of the consolidative theme in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as USD plummeted to a low of 108.97. The decline appears to be over-extended and further sustained weakness is not expected. USD is more likely to consolidate its loss and trade sideways to slightly lower. Expected range for today: 108.50/109.60”.

Next 1-3 weeks: “We turned neutral on JPY yesterday and the subsequent rapid drop from a high of 110.29 came as surprise. Instead of extending its recovery to 110.80 as expected previously, USD has likely moved into a choppy and broad consolidation range. In other words, there is no change to the neutral outlook but USD is expected to trade sideways from here, likely within a broad 108.00/110.50 range”.