USD/JPY now faces some side-lined trading in the short term – UOB

In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, the upside pressure in USD/JPY now seems to have lost some traction.

Key Quotes

24-hour view: Last Friday, USD fell sharply, but briefly to 144.43 and then rebounded strongly to close at 146.23 (+0.48%). While USD could rebound further, any advance is likely part of higher trading of 145.40/146.80. In other words, USD is unlikely to break clearly above 146.80. 

Next 1-3 weeks: Our latest narrative was from last Thursday (30 Aug, spot at 146.00). At that time, we were of the view that USD “is likely to trade in a range between 144.50 and 147.20.” On Friday, USD dropped briefly to 144.43, and then rebounded strongly. The price actions reinforce our view, and we continue to expect USD to trade in a range between 144.50 and 147.20.