USD/JPY is still expected to remain within the 130.50-134.50 consolidative range for the time being, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that the ‘oversold weakness in USD could extend to 131.50 first before stabilization is likely’. We added, ‘the next support at 131.00 is unlikely to come into view’. Our view was not wrong as USD dropped to 131.29 before rebounding. While downward pressure has eased, USD could drift lower today. However, the support 131.00 is still unlikely to come into view. Resistance is at 132.50, followed by 133.00.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (09 Jan, spot at 132.10). As highlighted, after the sharp drop last Friday, USD is likely to trade within a broad range of 130.50 and 134.50 instead of rebounding further.”