USD/JPY poised to extend its 115.50/118.60 range – UOB

USD/JPY is seen keeping its sideline pattern between 115.50/118.60 in the short-term, suggested FX Strategists at UOB Group.

Key Quotes

“Expectation for further weakness below 115.00 was wrong as USD surged from a low of 115.04 (seen during last Friday’s Asian hours). The rally appears to be running ahead of itself but further extension towards 117.45/50 would not be surprising (next resistance is closer to 118.00). On the downside, 116.30 is likely strong enough to hold any intraday pull-back (with minor support at 116.70)”.

“We indicated last Friday that we do not attach a high probability for further extension lower in USD towards 114.00. That said, the abrupt and sharp rebound from 115.04 was unexpected. The recent downward pressure has eased and USD has likely moved back into a broad consolidation range, likely between 115.50 and 118.50”.