USD/JPY clings to the sideline theme – UOB

The pair is seen sticking to the current neutral stance, likely to navigate between 110.50/112.00 range in the near term, suggested FX Strategists at UOB Group.

Key Quotes

“Expectation for a retest of the strong 110.45/50 support was wrong as USD rebounded strongly from a low of 110.65. The rapid recovery has room to extend further to 111.80 but last week’s peak near 112.10 is likely out of reach”.

“The sharp bounce from the 110.45 low seen two days ago suggests that the mild downward pressure has eased. After testing the bottom of the expected 110.50/112.00 consolidation range, USD appears to be moving towards the top end of the range. At this stage, a sustained move above 112.00 seems unlikely. Overall, there is no indication that the neutral phase that started last Wednesday would end any time soon”.