Rising probability of extra rangebound in USD/JPY – UOB

The near term outlook on USD/JPY points to the continuation of the sideline theme, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday USD “could test 108.00 but any advance is viewed as a higher trading range of 107.40/108.00”. USD subsequently touched 108.06 briefly before trading sideways for rest of the session. Momentum indicators are mostly ‘neutral’ now and USD is likely to continue to trade sideways for today, albeit likely at a slightly higher range of 107.70/108.10”.

Next 1-3 weeks: “The relatively strong rebound from last Thursday (18 Jul) steep decline was not exactly expected. While we “have doubts about the sustainability of any USD weakness”, we expected USD to “trade with a downside bias”. The price action over the past couple of days suggests that USD is likely caught in a broad 107.40/108.40 range”.