USD/JPY sticks to the neutral stance near term – UOB

In opinion of FX Strategists at UOB Group, the pair could extend losses to the 109.30 area in the next weeks.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as USD dropped sharply to a low of 110.10 before staging a strong recovery to hit an overnight high of 110.93. The rapid swing has resulted in a mixed outlook and USD is expected to continue to trade in a choppy manner, likely within a broad 110.30/111.00 range”.

Next 1-3 weeks: “USD dropped sharply to a low of 110.10 yesterday before staging a robust recovery. As highlighted yesterday, we believe it is premature to expect the start of a bearish phase even though we see scope for USD to edge lower and test the 109.35 low seen in late June. At this stage, a sustained move below this level is not expected. Overall, we expect USD to stay under pressure for now unless it can break above the ‘key resistance’ at 111.50”.