USD/JPY now points to further consolidation – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang suggest USD/JPY could now move within the 140.80/144.60 range in the short-term horizon.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the strong rebound amidst oversold conditions suggests USD is unlikely to weaken further’ and we expected USD to ‘consolidate and trade between 141.80 and 143.80’. Our view for consolidation was not wrong even though USD traded within a narrower range than expected (142.14/143.49). Further consolidation appears likely, expected to be between 141.90 and 143.50.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (12 Sep, spot at 142.80). As highlighted, the recent 2-week USD strength has ended. The current price actions are likely the early stages of a consolidation phase. After the recent outsized rally, USD is likely to consolidate within a broad range of 140.80/144.60.”