USD/JPY‘s bull run seems to have lost some impetus, noted FX Strategists at UOB Group.
24-hour view: “We expected USD to ‘trade sideways within a 108.30/108.95 range’ yesterday. Our view was not wrong as USD traded within a narrower range than expected (108.32/108.91). Further sideway trading would not be surprising but the slightly weakened underlying tone suggests a lower range of 108.20/108.80.”
Next 1-3 weeks: “We have expected USD to move higher for more than a week now. In our latest narrative from yesterday (09 Mar, spot at 109.10), we held the view that ‘the outlook for USD is still clearly positive and the next level to focus on is at 109.85’. USD subsequently rose to a fresh high of 109.23 but the advance was short-lived as it fell sharply to an overnight low of 108.40. Rapid loss in shorter-term momentum has diminished the odds for further USD strength but only a break of 108.00 (no change in ‘strong support’ level) would indicate that 109.23 is the extent of the current positive phase in USD.”