USD/JPY: Further rangebound seen within 105.00-106.00 – UOB

USD/JPY is forecasted to keep the range between 105.00 and 106.00 for the time being, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘edge downwards to 105.25’ did not materialize as it traded between 105.39 and 105.74 before closing little changed at 105.50 (+0.05%). Momentum indicators are turning flat and USD is likely to trade sideways for today, expected to be within a 105.35/105.75 range.”

Next 1-3 weeks: “We have held the same view since last week wherein USD “is in a correction phase”. We noted that ‘shorter-term momentum is beginning to improve and if USD were to close above 106.00, it could trigger a stronger recovery to 106.45’. Since then, USD attempted a few times but failed to maintain a foothold above the minor resistance at 105.75 (high has been 105.80). Momentum is turning “neutral” and while USD could still edge up to 106.00, any advance is viewed as part of a 105.00/106.00 range. To look at it another way, USD is likely to trade between 105.00 and 106.00 for now (odds for a sustained advance above 106.00 are not high).”