USD/JPY back to neutral stance – UOB

The outlook on the pair is now neutral from bullish, pointing to a consolidative trade within the 111.45/112.90 range.

Key Quotes

24-hour view: “USD dropped swiftly to a low of 111.98 before staging an equally rapid recovery to current level. The choppy swing has resulted in a mixed outlook. That said, the undertone has weakened upon the break of 112.00 and the immediate bias is for a probe lower towards the bottom of the expected 112.00/112.70 sideway trading range”.

Next 1-3 weeks: “We highlighted the increasing risk of a short-term top in recent updates and the breach of the 112.20 stop-loss yesterday was not exactly unexpected. The 113.43 high registered last Friday is deemed as a short-term top and from here, USD has likely moved into a consolidation phase. That side, the immediate bias is tilted to the downside but at this stage, any weakness is unlikely to move significantly below the expected 111.45/112.90 consolidation range”.