USD/JPY sticks to the sideline theme near term – UOB

USD/JPY should keep the trade between 110.20/113.10 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

“The anticipated extension higher fell short of the 112.35 target. The quick pull-back from a high of 112.11 suggests that a temporary top is likely in place. The pull-back appears to have scope to extend lower but 111.15 is a strong support and is unlikely to yield so easily. Resistance is at 111.90 followed by the high near 112.10”.

“We just shifted to a neutral stance yesterday and there is no change to the view. The current movement is viewed as part of a consolidation phase and USD is expected to trade sideways for now. The expected 110.20/113.10 range is rather broad at this stage but we should be able to narrow it down once we detect a drop in volatility”.