USD/JPY shifted to neutral from bearish – UOB

FX Strategists at UOB Group have shifted their outlook to neutral from bearish, expecting some consolidation in the near term.

Key Quotes

24-hour view: “While we expected a higher USD yesterday, we were of the view that a sustained move above 107.00 is unlikely. USD not only moved above 107.00 easily, it edged above the strong 107.30 resistance (overnight high of 107.37). There is no sign of weakness just yet and the current USD strength could extend further towards 107.75. The next resistance at 108.05 is however, likely out of reach for now. Support is at 107.00 but only a move back below 106.70 would indicate that the current upward pressure has eased”.

Next 1-3 weeks: “The rapid recovery from last week’s 105.52 low was unexpected. The break of 107.30 yesterday suggests that a short-term low is in place and USD has likely moved into a consolidation phase. In other words, the outlook is neutral for now and USD is expected to trade sideways within a broad 106.30/108.50 range”.