Additional gains could take USD / JPY to the 110.55 level in the coming weeks, suggest currency strategists at UOB Group.
24 hour view: “The strong rise of the USD / JPY during the American session to 110.32 was a surprise. While deep overbought conditions suggest that USD / JPY is unlikely to advance much further, it is too early to expect a pullback. For today, USD / JPY is more likely to trade between 109.95 and 110.35 “.
Next 1-3 weeks: “After moving sideways and relatively quiet for a few days, USD / JPY spiked to a high of 110.32 during the American session and closed at a 2-month high of 110.28. The strong momentum suggests greater USD / JPY strength, although the short-term overbought condition is likely to slow the pace of any further advance. From here on, a move to 110.55 would not be surprising, but at this point, it is premature to expect USD / JPY to move to the late March high of 110.96. All in all, the current bullish pressure is considered intact as long as the pair does not move below the ‘strong support’ level (currently at 109.60). “