USD/JPY: Shrinking bets for a move to 111.35 – UOB

A move to the 111.35 level in USD/JPY now seems to be losing traction, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectations for USD to ‘edge higher’ last Friday was wrong as it dropped to 110.47 before snapping back up. The price actions have resulted in a mixed outlook and USD could trade between 110.50 and 111.00 for today.”

Next 1-3 weeks: “In our latest narrative from last Thursday (24 Jun, spot at 111.00), we indicated that USD ‘is likely to head higher to 111.35’. We added, ‘the current positive outlook is deemed intact as long as USD does not move below 110.40’. USD dropped to 110.47 last Friday before rebounding quickly. Upward momentum has been dented and the chance for USD to advance to 111.35 has diminished. In order to rejuvenate the flagging momentum, USD has to move and stay above 111.00 within these 1 to 2 days or a break of 110.40 (no change in ‘strong support’ level) would not be surprising.”