No change to the rangebound theme in USD/JPY – UOB

UOB Group’s FX Strategists still see USD/JPY navigating within the 109.30-110.55 range in the next weeks.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘the bias for USD is on the downside but the major support at 109.30 is likely out of reach’. Our view was incorrect as USD traded sideways between 109.69 and 109.96. Momentum indicators are mostly neutral and USD could continue to trade sideways, albeit at a slightly higher range of 109.75/110.10.”

Next 1-3 weeks: “On 19 Aug, when USD was trading at 109.90, we highlighted that USD could trade within a 109.30/110.55 range for a period of time. Our view was not wrong as USD traded within the expected range for more than a week now. While shorter-term downward momentum is showing tentative signs of improving, at this stage, it is too early to expect USD to break below bottom of the expected range at 109.30. In other words, we continue to expect USD to trade between 109.30 and 110.55 for now.”