USD/JPY still focused on the 103.75-105.20 range – UOB

USD/JPY does not rule out further weakness, although the broader 103.75-105.20 trading range is expected to prevail in the next weeks.

Key Quotes

24-hour view: “USD traded between 104.05 and 104.61 yesterday, lower and narrower than our expected range of 104.15/104.75. Downward momentum has improved slightly but while USD could weaken from here, a sustained decline below the solid support at 103.75 is unlikely. On the upside, a move back above 104.45 would indicate the current mild downward pressure has eased.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Nov, spot at 104.45). As highlighted, ‘there is a slight downward bias in USD but any weakness is viewed as part of a lower trading range of 103.75/105.20’. Looking forward, USD has to close below 103.75 in order to indicate that it is ready to move towards last week’s low at 103.18. At this stage, the odds for such a scenario are not high.”