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USD/JPY is likely to trade within the 103.00-104.40 range in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “While our expectation for the sharp drop in USD to ‘extend lower’ was not wrong, it rebounded after touching 103.51 (we were expecting a test of 103.25). Momentum indicators are neutral and USD is expected to trade sideways for today, likely between 103.70 and 104.10.”

Next 1-3 weeks: “After rising strongly for four days in a row, the sudden and sharp drop in USD yesterday (12 Jan) came as a surprise. While our ‘strong support’ level at 103.50 is still intact, the rapid loss in momentum indicates that the positive phase that started last week has ended sooner than expected (we were expecting a break of 104.60). The strong but short-lived advance and the subsequent sharp drop has resulted in a mixed outlook. From here, USD could trade between 103.00 and 104.40.”