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USD/JPY is now likely to keep a broad trading range, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “The super-speed and outsized rebound in USD yesterday came as a surprised as it chalked a mammoth gain of +3.21% (105.63), the largest 1-day advance in almost 7 years. The sharp upswing appears to running ahead of itself and while a move above 106.00 is not ruled out (next resistance is at 106.90), USD is unlikely able to maintain a toehold above this level. Support is at 104.50 followed by 103.60.”

Next 1-3 weeks: “After plunging by -2.81% on Monday, USD rocketed back up and closed higher by a staggering +3.21% (NY close of 105.63). Such back-to-back outsized move of opposite directions is rare. The break of our ‘strong resistance’ at 105.00 indicates that the weak phase in USD that started in late February has ended in an abrupt manner. From here, USD could continue to whipsaw within a broad range. Only a clear break below 101.00 or above 109.00 would indicate it is ready to start on a directional move.”

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