USD/JPY remains within a consolidation mood between 105.00 and 106.00 in the next weeks, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We expected USD to move higher yesterday but were of the view that ‘any advance is viewed as part of a higher trading range of 105.25/105.75 (a sustained advance above 105.75 is not expected)’. Our view was not wrong as USD rose to a high of 105.79 before closing on a relatively firm note at 105.72 (+0.37%). Further USD strength is not ruled out but overbought conditions suggest that a move beyond the major resistance at 106.00 is unlikely. On the downside, a break of 105.45 would indicate that the current upward pressure has eased.”
Next 1-3 weeks: “Last Friday (02 Oct, spot t 105.55), we indicated that USD ‘is likely to trade between 105.00 and 106.00 for now’. USD subsequently dropped to a low of 104.92 before rebounding quickly and closed slightly lower at 105.33 (-0.16%). Momentum indicators are still mostly ‘neutral’ and the price actions indicate that USD could trade between 105.00 and 106.00 for a while more. Looking forward, USD has to post a daily closing out of the 105.00/106.00 range before a more sustained directional movement can be expected.”