USD/JPY Seen Holding Within Tight Trading Bands

Key Moments

Short-Term Trading Outlook

UOB Group’s FX strategists Quek Ser Leang and Lee Sue Ann indicated that the US Dollar is now expected to move within a slightly higher intraday range against the Japanese Yen, between 157.90 and 158.80.

They noted that in the prior session, the team had anticipated a 157.60 to 158.60 range. The US Dollar subsequently fell to 157.73, then recovered to 158.53, before ending the day almost unchanged at 158.25, a gain of 0.06%.

According to the analysts: “Yesterday, we were of the view that USD ‘is likely to trade in a range between 157.60 and 158.60’. USD then dipped to 157.73, rebounded to 158.53 before closing largely unchanged at 158.25 (+0.06%). The price action has resulted in a slight increase in upward momentum, but instead of a continued advance, USD is more likely to trade in a higher range of 157.90/158.80.”

Medium-Term Consolidation Scenario

Looking at the 1-3 week perspective, UOB Group maintains its earlier assessment that USD/JPY has entered a consolidation phase.

The strategists reiterated: “We continue to hold the same view as yesterday (21 Jan, spot at 158.15). As stated, USD ‘appears to have entered a consolidation phase’, and for the time being, USD ‘is likely to trade between 157.10 and 159.10’.”

Key Levels in Focus