USD/JPY faces further consolidation in the near-term – UOB

FX Strategists at UOB Group expect USD/JPY to trade within a side-line theme in the near-term.

Key Quotes

24-hour view: “USD staged a sudden and sharp jump as it closed higher by +0.77% (109.51). The advance appears to be running ahead of itself but there is room for USD to test 109.70 first before easing off. Support is at 109.20 followed by 109.00”.

Next 1-3 weeks: “Despite the relatively sharp USD decline to 108.30 last Friday, we indicated on Monday (03 Feb, spot at 108.45) that ‘downward momentum has not improved by as much’ and added, the ‘the prospect for a move to last month’s low near 107.65 is not high’. That said, the manner by which USD rocketed to a high of 109.54 yesterday came as a surprise (the +0.77% gain is the largest 1-day rise in 6 months). Downward pressure has dissipated but the near-term outlook is unclear. From here, USD is expected to trade sideways for a period, likely between the two major levels of 108.30 and 110.30.”