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In opinion of FX Strategists at UOB Group, USD/JPY is still seen navigating within the current consolidative theme in the next weeks.

Key Quotes

24-hour view: “We expected USD to ‘trade in a listless manner between 107.50 and 108.00’ yesterday. It subsequently traded within a narrower range than expected (between 107.56 and 107.89). The consolidation phase over the past several days appears to be coming to an end. From here, barring a move above 108.00 (minor resistance at 107.75), USD could drop towards 107.20. The next support at 107.00 is likely out of reach.”

Next 1-3 weeks: “USD continues to trade in a quiet manner and the build-up in momentum from last week has dissipated. This was not exactly surprising as we indicated last Friday (22 May, spot at 107.70) that the prospect for further USD strength has diminished. The current movement is viewed as part of a consolidation phase and only a daily closing out of the expected 107.00/108.00 range would suggest the start of a more sustained movement in USD. In other words, USD is likely to trade sideways for now.”