FX Strategists at UOB Group believe USD/JPY is likely to keep the side-lined theme in the next weeks.
24-hour view: “USD traded between 110.00 and 110.70 yesterday, narrower than our expected range of 109.65/110.60. The outlook from here is mixed and we continue to expect USD to trade sideways for now. Expected range for today, 109.80 and 110.60.”
Next 1-3 weeks: We highlighted yesterday (24 Feb) that ‘if USD were to break 111.20, it would indicate it need more time to muster enough momentum to challenge to the critical 112.40 level’. However, the manner by which USD cracked 111.20 and the subsequent plunge to a low of 110.32 came as a surprise. The price action suggests that last Thursday’s (20 Feb) high of 112.21 is a top, albeit likely a temporary one. From here, USD could continue to trade in volatile manner but is expected to stay to within last week’s broad 109.64/112.21 for a while.”