FX Strategists at UOB Group expect USD/JPY to extend the sideline theme in the next weeks.
Key Quotes
24-hour view: “Expectation for USD to “test 106.00 first” did not materialize as it rose to an overnight high of 106.64. While upward momentum has not improved by much, the advance has room to extend higher. However, 107.00 is a solid resistance and this level is unlikely to yield so easily. Support is at 106.35 followed by 106.20”.
Next 1-3 weeks: “USD recovered most of Tuesday’s (20 Aug) drop as it rebounded and closed higher at 106.61 (+0.36%). The price action is line with our view as we indicated in recent updates that “mixed indicators suggest USD could trade sideways for period and only a clear break out of the expected 105.50/107.30 sideway trading range would indicate that USD is ready for a sustained directional move”. In other words, there is no change in our view”.
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