USD/JPY: Scope for further consolidation near term – UOB

USD/JPY seems to have now moved into a consolidative phase and is likely to navigate within the 132.85-134.70 range for the time being, comment UOB Group Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we expected USD to consolidate and trade between 133.75 and 134.60. We did not anticipate the sharp drop to 133.36. Downward momentum is building and USD is likely to weaken further. However, the major support at 132.85 is likely out of reach today. Resistance is at 133.85; a break of 134.10 would suggest the build-up in momentum has faded.”

Next 1-3 weeks: “On Monday (24 Apr, spot at 134.10), we highlighted that ‘upward momentum is beginning to fade and the likelihood of USD advancing to 135.75 is diminishing’. We added, ‘a break of 133.50 would indicate that the USD strength that started early last week has come to an end’. USD breached 133.50 in NY trade as it dropped to a low of 133.36. USD appears to have entered a consolidation phase and for the time being, it is likely to trade in a range of 132.85/134.70.”