The upward bias in USD/JPY looks mitigated and is now expected to trade within the 134.50-137.10 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 expected to edge higher last Friday. Our view was incorrect as USD edged to a low of 135.73. Downward momentum has improved, albeit not much. Today, USD could edge lower but a sustained decline below 135.50 is unlikely. On the upside, a breach of 136.45 would suggest the current mild downward pressure has eased.”

Next 1-3 weeks: “Last Friday (03 Mar, spot at 136.65), we indicated that while the outlook for USD is still positive, the major resistance at 137.90 could be out of reach this time around. We highlighted, a break of 135.50 would indicate that USD is not strengthening further. USD dropped to a low of 135.73 in NY trade. While our ‘strong support’ at 135.50 is not breached, upward momentum has faded. In other words, the USD strength from the middle of last month has ended. USD appears to have moved into a consolidation phase and it is likely to trade within a range of 134.50/137.10 for now.”