USD / JPY could retest the 109.85 level if it left 109.50 behind with a daily close, currency strategists at UOB Group commented.
Key statements:
24-hour outlook: “Yesterday, we noted that” the underlying tone has strengthened a bit “and we held the view that the USD” could advance but is unlikely to challenge the resistance at 109.25. “Our view was not wrong, as the USD rose to 109.23 before breaking above 109.25 after the NY close. Bullish momentum is starting to improve and the USD could continue to climb but main resistance at 109.50 is probably out of reach. Support is at 108.95 in a row of 108.75 “.
Next 1-3 weeks: “We have expected the USD to” consolidate and trade between 108.20 and 109.50 “since the beginning of the week. Short-term bullish momentum is starting to improve, but the USD has to close above 109.50 before a move towards 109.85 can be expected. The prospect of a higher USD is not elevated for now, but would increase as long as the USD does not move below 108.50 in these few days. “
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