USD/JPY remains within a consolidative theme – UOB

FX Strategists at UOB Group expect USD/JPY to stay side-lined for the time being.

Key Quotes

24-hour view: “We highlighted yesterday ‘USD could ease from here but any weakness is likely limited to 109.65’. USD subsequently dipped to 109.60 before trading sideways for the rest of the sessions. While the underlying tone still appears to be on the soft side, this would likely translate into a lower trading range of 109.50/110.00 (a sustained decline below 109.50 is not expected).”

Next 1-3 weeks: “USD edged above 110.00 yesterday and touched 110.13. While upward momentum has not improved by much, the firm underlying tone suggests USD could edge upwards and test the top of our expected 109.20/110.30 sideway-trading range (narrowed from 109.00/110.30). As highlighted on Tuesday (11 Feb, spot at 109.75), the top of the range at 110.30 appears to be more vulnerable but USD has to register a NY closing above this level or the next resistance at 110.65 is unlikely to come into the picture. Overall, the current mild upward pressure could improve further as long as USD does not move below the bottom of the expected range at 109.30.”