USD/JPY now focused on 113.50 – UOB

FX Strategists at UOB Group remain bullish on the pair, while it is expected to test the mid-113.00s on the near term.

Key Quotes

24-hour view: “USD dipped briefly to hit a low of 111.64 last Friday before recovering quickly. Downward pressure has eased with the rebound and there is scope for the current strength to extend higher even though last week’s top near 112.70 is expected to offer solid resistance (next resistance is at 113.00). Support is at 111.95 followed by the 111.64 low”.

Next 1-3 week: “USD hit a low of 111.64 last Friday, just a few pips above the stop-loss for our bullish view at 1116.60. As highlighted last Friday, “upward momentum is showing signs of easing off but this is seen as part of a consolidation and not a reversal”. That said, USD has to move above the recent high near 112.70 soon or the odds for further USD strength would diminish quickly. The level to focus on above 112.70 is at 113.50. The latter level is major resistance and based on the current momentum, a clear break above this level seems unlikely. Stop-loss remains unchanged at 111.60”.