USD/JPY is likely to navigate within the 131.20-133.70 range in the next weeks, note Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group.
24-hour view: “We expected USD to trade in a range of 132.60/133.70 yesterday. However, USD dropped sharply to 132.01 and then rebounded. Despite the rebound, the weakness in USD has not stabilized. USD has scope to test 132.00 again before a sustained recovery is likely. On the upside, a breach of 133.25 (minor resistance at 132.90) would indicate that the weakness has stabilized.”
Next 1-3 weeks: “Yesterday (13 Apr, spot at 133.10), we noted that ‘upward momentum is beginning to fade and the odds of USD rising to 134.40 are diminishing’. We added, ‘only a break of 132.20 would indicate that USD is not strengthening further’. USD dropped to a low of 132.01 in NY trade. The breach of the ‘strong support’ at 132.20 indicates that the USD strength that started early this week has ended. USD appears to have moved into a consolidation phase and is likely to trade between 131.20 and 133.70 for now.”