USD/JPY: Further rangebound likely between 105.00-106.00 – UOB

USD/JPY forecasted to keep the side-lined trading between 105.00 and 106.00 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday ‘further USD strength is not ruled out but overbought conditions suggest that a move beyond the major resistance at 106.00 is unlikely’. However, USD traded in a relatively quiet manner between 105.45 and 105.78 before closing largely unchanged at 105.62 (-0.09%). The price action offers no fresh clues and USD could continue to trade sideways for now, likely holding within a 105.40/105.80 range.”

Next 1-3 weeks: “Last Friday (02 Oct, spot t 105.55), we indicated that USD ‘is likely to trade between 105.00 and 106.00 for now’. USD subsequently dropped to a low of 104.92 before rebounding quickly and closed slightly lower at 105.33 (-0.16%). Momentum indicators are still mostly ‘neutral’ and the price actions indicate that USD could trade between 105.00 and 106.00 for a while more. Looking forward, USD has to post a daily closing out of the 105.00/106.00 range before a more sustained directional movement can be expected.”