FX Strategists at UOB Group now see USD/JPY navigating within a broad range for the time being.
24-hour view: “Our view that USD ‘could move above 106.00’ is incorrect as it traded between 104.09 and 105.67. Momentum indicators are turning neutral and USD is likely to trade sideways for now. Expected range for today, 104.00/105.50.”
Next 1-3 weeks: “After plunging by -2.81% on Monday, USD rocketed back up and closed higher by a staggering +3.21% (NY close of 105.63). Such back-to-back outsized move of opposite directions is rare. The break of our ‘strong resistance’ at 105.00 indicates that the weak phase in USD that started in late February has ended in an abrupt manner. From here, USD could continue to whipsaw within a broad range. Only a clear break below 101.00 or above 109.00 would indicate it is ready to start on a directional move.”