USD/JPY: Extra range bound on the cards – UOB

USD/JPY is now seen trading within the 149.50-151.65 range in the next few weeks, according to UOB Group’s Markets Strategist Quek Ser Leang and Economist Lee Sue Ann.

Key Quotes

24-hour view: After USD dropped sharply to 150.14 on Tuesday, we highlighted yesterday that “the rapid decline appears to be overdone, and USD is unlikely to weaken much further.” We expected USD to trade sideways between 150.10 and 151.25. In NY trade, USD dipped briefly to 150.04 and then staged a surprisingly robust rebound to 151.44. Today, while USD could rebound further, it is unlikely to break the major resistance at 151.65. Support is at 150.90, followed by 150.60. 

Next 1-3 weeks: On Tuesday, USD dropped sharply to a low of 150.14. Yesterday (15 Nov, spot at 150.55), we highlighted that “while downward pressure has increased; it is not enough to suggest the start of a sustained decline in USD.” We added, USD “is more likely to trade in a range of 149.50151.65.” We continue to hold the same view.