Upward momentum in USD / JPY could push the pair to the 111.00 zone in the coming weeks, as noted by currency strategists at UOB Group.
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24 hour view: “We highlighted last Friday that ‘the USD / JPY rally has room to extend to 110.55, but is unlikely to threaten the next resistance at 110.80’. Our view that USD / JPY strengthened was not wrong despite the fact that the advance was close to breaking above 110.80 (high at 110.79). In view of the strong momentum, further strength in USD / JPY is not ruled out, but overbought conditions indicate that a breakout of 111.00 is unlikely. On the downside, a breakout of 110.35 (the minor support is at 110.50) would indicate that the current pressure to the upside has eased. “
Next 1-3 weeks: “We turned positive in USD / JPY last Friday (Sep 24, USD / JPY at 110.30) even though we were of the opinion that the major resistance at 110.80 may not enter the scene so soon. We weren’t expecting the quick way. as USD / JPY is approaching 110.80 as it rose to 110.79 during the American session.While in the overbought zone, the current strength of USD / JPY could extend to 111.00, with an extension less likely to 111.20. Positive outlook is considered intact as long as it does not fall below the 109.95 level (‘strong support’ was at 109.65 last Friday).
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