USD/JPY room for further upside – UOB

FX Strategists at UOB Group do not rule out extra gains in spot, although a test of 112.14 appears unlikely for the time being.

Key Quotes

24-hour view: “We expected USD to “grind higher and test the 111.80 resistance” but warned, “the odds for a sustained move above this level are not high”. USD did not quite test 111.80 as it eased off quickly after touching a high of 111.75. Upward pressure has eased off considerably with the pull-back and we do not expect the 111.80 level to be challenged (at least not for today). USD is more likely to consolidate and trade sideways to slightly lower, expected to be within 111.10/111.70 range”.

Next 1-3 weeks: “While USD closed on a relatively strong note yesterday (NY close of 111.44, +0.33%), we are not convinced that the current price action is the start of a bullish phase. However, further advance in USD is not ruled out but last month’s 112.14 peak is a solid resistance and is likely out of reach (at least for the next one week or so). On the downside, 110.75 is acting as a solid support now”.