USD/JPY still forecast to trade within the 131.30-135.60 range in the next weeks, noted FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘advance further’ yesterday but we were of the view that ‘overbought conditions suggests the resistance at 134.60 is unlikely to come under threat’. Our view turned out to be correct as USD rose to 134.54 before pulling back quickly. Upward momentum has slowed and USD is unlikely to advance further. For today, USD is more likely to trade between 133.10 and 134.50.”

Next 1-3 weeks: “There is no change in our view from yesterday (03 Aug, spot at 133.50). As highlighted, the recent USD weakness has ended. The current price actions are likely the early stages of a broad consolidation phase and USD is expected to trade between 131.30 and 135.60 for now.”