USD/JPY still neutral, moves to a consolidative theme – UOB

The pair’s outlook stays neutral in the near term horizon and it should face further consolidation, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for a short-term bottom was wrong as USD dropped sharply to hit a low of 106.36. The decline was however fleeting as USD rebounded to end the day largely unchanged. The improved undertone suggests that there is scope for a test of the strong 107.45/50 resistance but a clear break above this level appears unlikely. Support is at 106.75 followed by the 106.36 low. The latter level is expected to be strong enough to hold any intraday dip”.

Next 1-3 weeks: “USD dipped to a low of 106.36 but rebounded strongly to close largely unchanged for the day. The price action reinforces our current neutral view for USD. The outlook remains unclear and USD is expected to continue to trade listlessly, likely within a relatively broad 105.80/108.30 range”.