USD/JPY could now trade within the 109.50-110.70 range in the short-term horizon, suggested FX Strategists at UOB Group.
24-hour view: “While we expected USD to strengthen yesterday, we were of the view that ‘a break of the strong resistance at 110.20 is unlikely’. The subsequent USD strength exceeded our expectation as it rose 110.38. The rapid rise appears to be running ahead of itself and USD is unlikely to strengthen much further. For today, USD is more likely to trade sideways between 109.95 and 110.45.”
Next 1-3 weeks: “We noted yesterday (21 Jul, spot at 109.90) that ‘downward momentum has waned but only a break of 110.20 would indicate that USD is unlikely to weaken further’. USD subsequently broke 110.20 and rose to 110.38. Downward pressure has dissipated and USD is unlikely to weaken further. The recent sharp but short-lived swings have resulted in a mixed outlook and USD could trade within a 109.50/110.70 range for now.”
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