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The 105.00-106.60 range is expected to dominate the price action in USD/JPY in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘is likely to drift lower to 105.35; next support at 105.00 is unlikely to come into the picture’. Our view was correct as USD dropped to a low of 105.30 before recovering and traded sideways for the rest of the sessions. Momentum indicators are mostly neutral now and for today, USD is likely to consolidate and trade between 105.25 and 105.75.”

Next 1-3 weeks: “We highlighted on Monday (03 Aug, spot at 106.00) that the ‘outlook is unclear and USD could trade in a choppy manner within a broad 105.00/107.00 range’. However, USD traded in a relatively calm manner as it drifted lower over the past few days. The price action offers no fresh clues and for now, we continue to expect USD to consolidate, albeit within a narrower range of 105.00/106.00. Looking forward, only a clear break of 104.70 would indicate that USD is ready to tackle the 104.00 level.”