USD/JPY keeps the consolidation alive – UOB

FX Strategists at UOB Group suggested the pair remains in a consolidative mode for the time being.

Key Quotes

24-hour view: “Expectation for a lower USD yesterday did not materialize as it traded sideways within a relatively narrow range of 38 pips (between 111.14 and 111.52). We continue to detect a soft underlying tone and expect USD to edge lower to 111.00 from here. The next support is at 110.75 and in view of the lackluster momentum, this level is unlikely to be threatened. Resistance is at 111.55 followed by 111.75”.

Next 1-3 weeks: “We have held the same view since last Wednesday (01 Aug, spot at 111.80) that we are not convinced that the post-BOJ rally in USD is the start of a bullish phase. USD subsequently hit of 112.14 and has since surrendered a big part of its gains. We continue to view the current movement as part of a consolidation phase and expect USD to trade sideways, albeit likely at narrower range of 110.60/112.20 (from previous expectation of 110.60/112.50)”.