USD/JPY clings to the 110.00-111.15 range – UOB

USD/JPY is expected to trade between 110.00 and 111.15 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While we expected USD to strengthen yesterday, we were of the view that ‘a clear break of 110.55 is unlikely’. The subsequent USD strength exceeded our expectation as it rose to 110.64. Despite the relatively sharp advance, upward momentum has not improved by much. However, there is room for USD to test 110.75 first before a pullback can be expected. The major resistance at 111.10 is not expected to come into the picture. On the downside, a breach of 110.30 would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We have expected USD to weaken since the middle of last week. After USD rebounded strongly from 109.52, we highlighted yesterday that ‘downward momentum is beginning to wane and a break of 110.55 would indicate that USD is not ready to move below 109.50 just yet’. USD rose to an overnight high of 110.64 and downward momentum has dissipated. From here, USD is likely to trade between 110.00 and 111.15 for a period of time.”