USD/JPY: Rising bets for a move above 110.55 – UOB

Chances for USD/JPY to surpass the 110.55 level in the near term remain on the rise, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we expected USD to ‘drift lower to 109.55’. Our view was incorrect as USD dropped to 109.67 before staging a surprisingly strong advance (high of 110.31 in NY). The advance has gathered momentum and USD could strengthen further. That said, overbought conditions suggest that a break of the major resistance at 110.55 is unlikely. Support is at 110.10 followed by 109.95.”

Next 1-3 weeks: “We have expected USD to trade within a 109.30/110.55 range for about 3 weeks now. Our view was not wrong but after the strong advance yesterday (07 Sep), upward momentum is beginning to improve and the risk of a break of 110.55 has increased. Looking ahead, the next resistance above 110.55 is at 110.80. On the downside, if 109.95 is breached within these few days, it would indicate that USD is still ‘caught’ in a 108.30/110.55 range.”