USD/JPY erratic performance seen near term – UOB

The pair is expected to continue within the ongoing consolidative theme in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected a higher USD yesterday but the ease of which the strong 107.30 resistance was taken out came as a surprise (overnight high of 107.49). While USD closed on a solid note (NY close of 107.37), the sharp decline after NY close suggests that a short-term top is in place. A deeper pull-back would not be surprising but at this stage, we view any weakness as part of 106.70/107.40 consolidation range and not the start of a sustained decline”.

Next 1-3 weeks: “USD moved above the top of our previously expected 105.70/107.30 consolidation range as it hit an overnight high of 107.49. However, it subsequently slumped after NY close (after Trump announced more trade tariffs) and is currently trading just above 107.00. The recent whippy price action has resulted in a mixed outlook and we continue to hold a neutral stance. We expect further erratic trading from here, likely within a broad 106.20/107.90 range”.