UOB’s Quek Ser Leang and Lee Sue Ann note that USD/JPY briefly plunged before rebounding to close near 160.00, with upward momentum now fading. They expect the pair to consolidate between 159.20 and 160.30 in the near term, maintaining a firm underlying tone. On a multi‑month view, there is still scope for gains above 159.45, though a test of the 162.00 high is seen as unlikely.

Consolidation expected near 160.00

"24-HOUR VIEW: Two days ago, USD rose to a high of 159.98. Yesterday, we highlighted that “further USD strength is not ruled out, but deeply overbought conditions and negative divergence suggest any advance is unlikely to reach 160.25.” We also highlighted that “to keep the overbought momentum going, USD must hold above 159.60, with minor support at 159.80.” The subsequent price movements did not unfold as expected. USD suddenly plunged to 159.35 before snapping back up to close little changed at 160.03 (+0.09%). Despite the sharp rise, upward momentum has not increased much, and USD is unlikely to rise much further. Today, USD is more likely to trade in a range between 159.60 and 160.15"

"1-3 WEEKS VIEW: We have held a positive USD stance since the middle of last month. In our most recent narrative from Tuesday (02 Jun, spot at 159.65), we stated that “while USD remains positive, it must break and hold above 159.95 before a move to 160.25 can be expected.” Yesterday, USD fell and broke below our ‘strong support’ level at 159.40, reaching a low of 159.35. While USD subsequently rebounded strongly, upward momentum has largely faded. From here, we expect USD to range-trade, albeit with a firm underlying tone, likely between 159.20 and 160.30."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)