USD/JPY is now seen within the 128.40-131.00 range in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we highlighted that USD ‘could edge above 131.25’.  We added, ‘the next resistance at 131.60 is not expected to come into the picture’. While our view was not wrong as USD rose to 131.34, we did not expect the subsequent sharp pullback from the high (low of 130.10 in NY). The pullback has scope to extend to 129.60. The next support at 129.10 is unlikely to come under threat. Resistance is at 130.35 followed by 130.70.”

Next 1-3 weeks: “Last Friday (06 May, spot at 130.40), we highlighted that there is room for USD to retest the 131.25. Yesterday (09 May, spot at 130.85), we highlighted that a clear break of 131.25 would open up the way for USD to advance to 131.65. USD subsequently rose to 131.34 before dropping sharply. The build-up in momentum has fizzled out. USD appears to have moved into consolidation phase and is likely to trade between 128.40 and 131.00.”