USD/JPY stays sidelined for the time being – UOB

In opinion of FX Strategists at UOB Group, the pair is seen rangebound in the near term, with the neutral outlook still unchanged.

Key Quotes

24-hour view: “Against our expectation for further weakness towards 105.30, USD surged after touching a low of 105.68. The rapid pace of the upmove came as a surprise as USD recouped all the losses made on Monday as it hit a high of 106.65. The rally appears to be running ahead of itself and while a test of 106.80 is not ruled out, a sustained move above last week’s top near 107.00 seems unlikely. On the downside, only a move back below 106.00 would indicate that the current upward pressure has eased. Minor support is at 106.25. The 105.68 low is not expected to come into the picture, at least not for today”.

Next 1-3 weeks: “USD rebounded strongly and regained all and more of the loss made on Monday. As highlighted yesterday (03 Apr, 105.75), we still view last week’s 104.55 low as a short-term bottom and only an unlikely break of this level would indicate that USD has entered a bearish phase. For now, we expect USD to continue to trade sideways, albeit likely at a higher 105.50/107.30 range (instead of 104.80/106.80 expected previously)”.