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USD/JPY is still forecasted to trade within a consolidative fashion between 105.50 and 106.90 for the time being.

Key Quotes

24-hour view: “We highlighted yesterday USD ‘could consolidate and trade between 106.00 and 106.50’. While our expectation for USD to consolidate was not wrong, it traded within a narrower range than expected (between 106.11 and 106.38). Momentum indicators are still mostly ‘neutral’ and USD could continue to consolidate for now, likely between 106.05 and 106.50.”

Next 1-3 weeks: “We noted last Thursday (03 Sep, spot at 106.20) that ‘the odds for USD to test the 104.70 have diminished’. We added, ‘a breach of 106.55 would indicate that USD has moved back into a consolidation phase’. While the 106.55 level is still intact, downward momentum has more or less dissipated. In other words, the current price action is likely part of a consolidation phase and USD is expected to trade between 105.50 and 106.90 for a period of time.”