USD/JPY is now seen within the 107.00/109.00 range – UOB

According to FX Strategists at UOB Group, the outlook on USD/JPY is now mixed and is expected to move into a 107.00/109.00 range in the next weeks.

Key Quotes

24-hour view: “While we held the view yesterday that ‘an interim top could be in place’, we did not anticipate the sudden and sharp sell-off that sent USD reeling to an overnight low of 108.22. The price action this morning remains weak and USD could continue to decline from here. Only a move back above 108.80 (minor resistance is at 108.50) would indicate the current weakness has stabilized. Until then, USD could weaken further to 107.80 (next support is at 107.50).”

Next 1-3 weeks: “After surging to a high of 109.84 last Friday (05 Jun), the abrupt turnaround that resulted in huge decline yesterday (08 Jun) came as a surprise. Note that USD closed at 108.42 and lost -1.06%, the biggest 1-day drop in 10 weeks. The breach of our 108.55 ‘strong support’ level indicates that the positive phase that started last week came to an abrupt end. The sharp and rapid swings have resulted in a mixed outlook and it may take a few days before a clearer picture emerges. Meanwhile, USD could trade in a choppy manner but is likely to stay within a 107.00/109.00 range for now.”