USD/JPY points to extra rangebound near term – UOB

Following the recent price action, USD/JPY is still seen navigating within a sideline theme, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to trade sideways was wrong as it soared to an overnight high of 108.64. While the rapid rise appears to have room to extend higher, the prospect for a sustained break above 108.90 is not high (next resistance is at 109.10 followed closely by the major level of 109.30). Support is at 108.40 followed by 108.20”.

Next 1-3 weeks: “Our view from last Friday (01 Nov, spot at 108.05) for USD to “trade lower towards 107.50” was proven wrong quickly as USD edged above the 108.60 ‘strong resistance’ level (overnight high of 108.64). The rapid rebound after the sharp drop to 107.87 last week has resulted in a mixed outlook. From here, USD could trade sideways between the two strong levels of 107.90 and 109.30 for a period. At this stage, there is no pre-indication on which side of the range is more ‘vulnerable’.