USD/JPY neutral, within 110.60/112.70 range – UOB

The pair’s outlook shifted to neutral from bullish, expecting it to gravitate between 110.60 and 112.70 in the short term.

Key Quotes

24-hour view: “The solid resistance highlighted at 112.70 yesterday was unthreatened as USD staged a surprisingly strong reversal from a high of 112.52. The rapid drop appears to be running ahead of itself even though a dip below the overnight low of 111.46 is not ruled out. That said, the next support at 111.10 is a major level and is unlikely to yield so easily. Resistance is at 112.05 followed by 112.35. Further up, the 112.70 level remains as a solid resistance and is not expected to be challenged for now”.

Next 1-3 weeks: “The bullish phase that started about 2 weeks ago (13 Sep, spot at 110.15) has ended with the breach of the stop-loss at 111.60 yesterday (low has been 111.46). The current movement is viewed as the start of a consolidation phase and USD is expected to trade sideways from here, likely between 110.60 and 112.70”.