The currency strategists of UOB Group noted that the USD / JPY bullish momentum has improved in the last sessions.
24 hour perspective: “Yesterday we highlighted that overbought conditions suggested that greater USD strength is unlikely. We added that the dollar was more likely to consolidate and trade between 104.40 and 105.00. Subsequently, the USD traded between 104.59 and 105.03. bullish momentum has improved somewhat, conditions remain overbought and any advance in the USD is likely to be limited to a test of 105.15. Major resistance at 105.40 is unlikely to enter the picture. The support is at 104.70 followed by 104.50 “.
Next 1-3 weeks: “We highlighted yesterday (Feb 1, pair at 104.70) that the positive outlook on USD was intact and a breakout of 105.00 would shift focus to 105.40. Subsequently, the dollar rose a few pips above 105.00 (high of 105.03) before settling at 104.91 (+ 0.22%). The bullish momentum has improved, although not much. The overall positive outlook remains intact, but 105.40 level may not enter the scene as soon. The positive outlook is considered intact as long as the USD does not move below 104.25 (previously ‘strong support’ level at 104.00 yesterday). “
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