UOB Group’s FX Strategists noted USD/JPY could now head towards the vicinity of the key 110.00 yardsticks within the next weeks.
24-hour view: “We highlighted last Friday that ‘there is the chance for USD to check the main resistance at 109.30’. We added, ‘a clear break of this level is unlikely and therefore the next resistance at 109.60 isn’t expected to return into the picture’. Our view wasn’t wrong as USD rose to 109.36 before closing on a firm note at 109.27 (+0.33%). Upward momentum remains strong and further advance wouldn’t be surprising albeit overbought conditions could ‘limit’ any gains to a test of 109.60. A move to subsequent major resistance at 109.95 would come as a surprise. Support is at 109.00 but the stronger level is at 108.75.”
Next 1-3 weeks: “We turned positive on USD last Wednesday (28 Apr, spot at 108.80) where we indicated that USD ‘is expected to trade with an upward bias towards 109.30’. Our view wasn’t wrong as USD rose to 109.36 on Friday. While upward momentum has not improved by much, the upward bias remains intact. subsequent resistance is at 109.60 followed by a serious level at 109.95. On the downside, a breach of 108.55 (‘strong support’ level previously at 108.20) would indicate that the positive phase has ended.”
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