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According to FX Strategists at UOB Group, the consolidative mood is expected to persist in USD/JPY for the time being.

Key Quotes

24-hour view: “The rapid rebound in USD (after Tuesday’s steep drop) was unexpected. The rapid rise appears to be running ahead of itself and further sustained up-move is not expected for today. That said, the advance in USD could test 108.00 first before easing off. The next resistance at 108.20 is not expected to come into the picture. Support is at 107.45 followed by 107.25″.

Next 1-3 weeks: “We highlighted on Tuesday (24 Sep, spot at 107.55) that a “short-term top is in place” and expected USD to trade sideways to “slightly lower” within a 107.10/108.20 range. Despite the subsequent sharp drop to 106.95, we indicated yesterday (25 Sep, spot at 107.15) that USD “does not appear to be ready for a sustained down-move” and “only a NY close below 106.90 would suggest that USD is ready to challenge the major 106.20 support”. That said, the rapid manner by which USD recovered its loss was not exactly expected (USD surged to an overnight high or 107.88). The price action suggests that USD is still in sideway-trading phase, likely within a 107.00/108.20 range”.