Additional earnings in USD/JPY they are likely once the 111.00 zone is broken, as noted by FX strategists at UOB Group.
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24-hour perspective: “We expected the USD to strengthen yesterday, but we are of the opinion that ‘any advance was likely limited to a test of 110.55 and the large resistance at 110.80 was not expected to enter the picture. Subsequent strength from the USD exceeded our expectations as came close to breaking 110.80 (high of 110.79). The iThe upside momentum has improved and USD could test 111.00. In view of overbought conditions. The dollar may not be able to hold a support point above this level. The support is at 110.40 followed by 110.25. “
Next 1-3 weeks: “On Monday (June 21, pair at 110.20), we had the opinion that the USD had moved into a consolidation phase and we expected it to trade within a range of 109.60 / 110.80. We did not anticipate how quickly the USD is approaching the top of the expected range (overnight high of 110.79). Momentum to the upside has improved, but not by much. From here, the USD has to close above the major resistance at 111.00 before that a sustained advance can be expected. The outlook for such a move appears to be high as long as USD remains above 110.05 within these days. Looking ahead, the next resistance above 111.00 is at 111.35.”
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