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FX Strategists at UOB Group expect USD/JPY to extend the sideline theme in the next weeks.

Key Quotes

24-hour view: “Expectation for USD to “test 106.00 first” did not materialize as it rose to an overnight high of 106.64. While upward momentum has not improved by much, the advance has room to extend higher. However, 107.00 is a solid resistance and this level is unlikely to yield so easily. Support is at 106.35 followed by 106.20″.

Next 1-3 weeks: “USD recovered most of Tuesday’s (20 Aug) drop as it rebounded and closed higher at 106.61 (+0.36%). The price action is line with our view as we indicated in recent updates that “mixed indicators suggest USD could trade sideways for period and only a clear break out of the expected 105.50/107.30 sideway trading range would indicate that USD is ready for a sustained directional move”. In other words, there is no change in our view”.