In light of the recent price action, USD/JPY is now likely to trade between 121.00 and 124.50 in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to “trade in volatile manner between 122.60 and 124.60” yesterday. USD subsequently traded within a range of 121.97/124.30 before closing at 122.84 (-0.86%). The current movement appears to be part of a consolidation phase and USD is likely to trade between 121.50 and 122.70 for today.”

Next 1-3 weeks: “Yesterday (29 Mar, spot at 123.55), we highlighted that the rally is still intact but it is left to be seen if it can maintain a foothold above 125.10. We added, “a breach of 122.20 would indicate that the USD rally that started more than 2 weeks ago (see annotations in the chart below) has come to an end. USD subsequently dropped to 121.97 before rebounding. The breach of our ‘strong support’ level indicates that the rally has come to an end. USD appears to have moved into a consolidation phase and is likely to trade between 121.00 and 124.50 for now.”