USD/JPY now likely moved into a range bound theme – UOB

Following the recent price action, USD/JPY is now predicted to gyrate around 114.75 and 116.05 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for a higher USD last Friday were incorrect as it sold off sharply and cracked a few strong support levels with ease (low has been 115.00). Despite the sharp bounce from the low, the risk remains on the downside. For today, USD could retest 115.00 but a sustained decline below this level is unlikely (the next support is at 114.75). Resistance is at 115.60 followed by 115.85.”

Next 1-3 weeks: “The sharp sell-off in USD to a low of 115.00 last Friday came as a surprise. The break of our ‘strong support’ at 115.40 indicates that the recent upward pressure has dissipated. The current movement is viewed as part of a consolidation and USD is likely to trade between 114.75 and 116.05 for now. Looking ahead, a break of 114.75 could potentially trigger a deep decline in USD.”