USD / JPY is forecast to advance to the 106.00 zone in the coming weeks, say the currency strategists of the UOB Group.
Key Comments:
24 hour view: “We highlighted last Friday that ‘there is room for USD / JPY to extend its gains, but main resistance at 106.00 is unlikely to enter the scene.’ We added, ‘105.80 is already a pretty strong level.’ Our view was not there. wrong, as USD / JPY rose to 105.76 before reversing. The current move is considered part of a consolidation phase and USD / JPY is likely to trade between 105.25 and 105.75 today. “
Next 1-3 weeks: “We have expected USD / JPY to strengthen from last week. Our last narrative was from Tuesday (Feb 2, USD / JPY at 104.85) where we highlight that ‘the bullish momentum has improved slightly and although the outlook for USD / JPY remains positive, the main resistance at 105.40 may not appear as soon. ‘. In that regard, we were not expecting the sudden surge in USD / JPY last week (Feb 4) which sent it to 105.56. Further USD / JPY strength looks likely and the next level to focus on is 106.00. The positive outlook is considered intact as long as USD / JPY does not move below 104.80 (‘strong support’ level, previously 104.50). “
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