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USD/JPY is likely to navigate within the 103.70-105.30 range in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘the underlying tone has firmed somewhat and there is room for USD to edge upwards but any advance is viewed as a higher trading range of 103.60/104.05’. We added, ‘a sustained rise above 104.05 is not expected’. USD subsequently dropped to 103.67 before lifting off suddenly as it surged to an overnight high of 104.63. The rapid rise appears to be running ahead of itself but there is room for USD to test 104.80 first before the current upward pressure should ease. The next resistance at 105.10 is not expected to come into the picture. Support is at 104.25 followed by 104.00.”

Next 1-3 weeks: “One week ago (17 Nov, spot at 104.45), we held the view that there is a ‘slight downward bias in USD but any weakness is viewed as part of a lower trading range of 103.75/105.20’. After USD dropped to 103.63, we indicated last Thursday (19 Nov) that ‘while the underlying tone still appears soft, the prospect for USD to move to 103.18 from here is not high’. That said, the sudden surge in USD that sent it soaring to an overnight high of 104.63 came a surprise. The mild downward pressure has dissipated and the current movement is viewed as the early stages of a consolidation phase and USD could trade between 103.70 and 105.30 for now.”

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