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USD/JPY is still seen navigating the 105.50-106.90 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday ‘the slight increase in downward momentum could lead to further weakness but for today, the major support at 105.50 is unlikely to come into the picture’. We added, ‘minor support is at 105.70’. USD subsequently dropped to a low of 105.76 before rebounding strongly. Upward momentum is beginning to improve but appears tentative for now. From here, USD could edge upwards but any advance is viewed as part of a higher trading range of 106.00/106.50. In other words, a sustained rise above 106.50 is not expected.”

Next 1-3 weeks: “There is not much to add to our latest narrative from Monday (07 Sep, spot at 106.25). As highlighted, the current movement in USD is likely part of a consolidation phase and USD is expected to trade between 105.50 and 106.90 for a period of time. The price actions over the past few days offer no fresh clues and we continue to hold the same view for now.”