USD/JPY still facing a broad consolidative theme – UOB

According to FX Strategists UOB Group, the pair keeps the neutral stance and remains poised to extend the ongoing sideline pattern.

Key Quotes

24-hour view: “We held the view that the recovery in USD “has room to extend further” but added that a clear break above 110.65 seems unlikely. USD subsequent hit a high of 110.75 (holding below the 110.90 resistance) before dropping sharply to hit an overnight low of 109.81. While the decline appears to be running too fast, too soon, a retest of the 109.53 low seen earlier this week would not be surprising. At this stage, the odds for further extension to the next support at 109.20 are not high. Resistance is at 110.20 followed by 110.50. The 110.75 high is not expected to be challenged for now”.

Next 1-3 weeks: “USD edged above the top of our expected 109.10/110.65 consolidation range but slumped after touching a high of 110.75. The price action reinforces our current neutral view and we continue to expect USD to trade sideways, still likely within a 109.10/110.65 range”.