USD/JPY neutral, further consolidation likely – UOB Group

FX Strategists at UOB Group expects the pair to extend the consolidative theme for the time being.

Key Quotes

“The sharp decline in USD yesterday that took out the strong 105.70 support came as a surprise. The break of 105.70 has put paid to our previous expectation for USD to extend its rebound to 107.90”.

“However, the pullback from last week’s 107.01 top is viewed as part of a broader consolidation phase and not the start of a sustained decline. We still view last week’s 104.55 low as a short-term bottom and only an unlikely break below this level would indicate that USD has re-entered a bearish phase. In the meantime, we expect USD to trade sideways, likely within a relatively broad 104.80/106.80 range.