USD/JPY likely to remain within 108.70/110.30 range – UOB

FX Strategists at UOB Group remain neutral on the pair in the near term, expecting it to navigate within the 108.70/110.30 range in the next weeks.

Key Quotes

24-hour view: “We expected a lower USD last Friday but were of the view that “a break of 109.20 is not expected”. Against our expectation, USD hit a low of 109.17 before rebounding modestly. While downward momentum has eased somewhat, it is too early to expect a sustained recovery. USD is more likely to consolidate and trade sideways at these lower levels, likely within a 109.10/109.80 range”.

Next 1-3 weeks: “We have held the same view that since last Monday (04 Jun, spot 109.55) wherein we expect the positive bias in USD could lead to a probe of the top of the expected 108.50/110.50 consolidation range. After touching a high of 110.26 on Wednesday (06 Jun), the short-term USD strength faltered as it subsequently closed lower for two consecutive days. From here, there is no change to the neutral outlook and USD is expected to continue to trade sideways, albeit likely within a narrower 108.70/110.30 range”.