USD/JPY now faces some consolidation – UOB

UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia note USD/JPY could now navigate within the 148.80-150.80 range.

Key Quotes

24-hour view: Last Friday, we expected USD to trade in a range between 149.85 and 151.00. Instead of trading in a range, USD dropped to a low of 149.18 in NY trade. Despite the sharp drop, downward momentum has not increased by much, and USD is unlikely to weaken much further. Today, USD is likely to trade sideways, probably between 149.10 and 150.30.

Next 1-3 weeks: We highlighted last Friday (03 Nov, spot at 150.45) that “the recent buildup in upward momentum has waned, and the likelihood of USD breaking above 152.00 has diminished.” USD then fell below our ‘strong support’ level of 149.50 (low of 149.18). USD appears to have entered a range-trading phase, and it is likely to trade between 148.80 and 150.80 for now.