USD/JPY now neutral, could test 110.10 – UOB

In opinion of FX Strategists at UOB Group, the pair could regain the 110.00 handle and above in the next weeks.

Key Quotes

24-hour view: “The anticipated recovery exceeded our expectation by a wide margin as USD surged above several strong resistances to hit a high of 109.50. With no sign of weakness just yet, further USD strength would not be surprising but overbought conditions suggest that any upmove would likely be at a slower pace and could be limited to a test of 109.80. Support is at 109.00 but only a move below 108.65 would indicate that a short-term top is in place”.

Next 1-3 weeks: “The shift to a bearish stance yesterday was untimely as USD extended its swift and strong rebound (from a low of 107.31 last Friday). The rapid price action was unexpected but the swift recovery appears to have room to extend higher to 110.10. At this stage, a sustained move above this level is not expected. On the downside, only a move back below 108.35 would indicate that the immediate upward pressure has eased (minor support at 108.65)”.