The outlook for USD / JPY looks positive, with the next targets above the round 110.00 level. over the next several weeks, UOB Group currency strategists suggest.
Key Comments:
24 hour view: “While we expected USD / JPY to strengthen yesterday, we are of the opinion that ‘no advance is expected to threaten the main resistance at 109.55’. However, USD / JPY broke above 109.55 and spiked to a high of 109.92. Strong and rapid rally seems over the top, but there is scope for USD / JPY to test 110.25 first before retracing (minor resistance is at 110.10). For today, any retracement should hold above 109.40 (minor support is at 109.65) ”.
Next 1-3 weeks: “Yesterday, we noted that ‘short-term bullish momentum is starting to improve’, but we are of the opinion that ‘it seems too early to expect the start of a sustained directional move.’ We were not expecting the strong rally in USD / JPY that sent it to 109.92 Strong bullish momentum indicates that USD / JPY is likely to strengthen further. Resistance is at 110.25 followed by 110.55. To take advantage of the current momentum, USD / JPY should not break through “strong support” at 109.15. short-term note, 109.40 is already a strong support level. “
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