Shrinking bets for further USD/JPY gains – UOB

USD/JPY is now facing risks of further consolidation around current levels, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD traded between 108.43 and 108.72 yesterday, narrower than our expected sideway-trading range of 108.35/108.80. The subsequent soft daily closing in NY (108.47) has increased the risk of a pullback towards 108.05. For today, the next support at 107.80 is not expected to come into the picture. On the upside, 108.80 is expected to be strong enough to cap any intraday USD strength”.

Next 1-3 weeks: “There is not much to add to the update from Monday (21 Oct, spot at 108.40) as USD traded in a relatively quickly manner yesterday. As highlighted, the recent USD strength has run its course and USD is likely to trade sideways within a 107.80/109.00 range for now. Downward momentum has picked up slightly and the risk for the next few days is for USD to probe the bottom of the expected range at 107.80. At this stage, the prospect for a sustained decline below this level is not high”.