UOB Group’s FX Strategists noted USD/JPY is now seen visiting the 111.35 level in the next weeks.
Key Quotes
24-hoour view: “Our view for USD yesterday was that it ‘could test 111.00 but may not be able to maintain a foothold above this level’. Our view was not wrong as USD rose to 111.10, dropped back down quickly to 110.65 during London hours before recovering to close at 110.94 in NY. Upward momentum has improved, albeit not by all that much and the bias for today is on the upside. However, any advance is unlikely to break the major resistance at 111.35. Support is at 110.80 followed by 110.60.”
Next 1-3 weeks: “Yesterday (23 Jun, spot at 110.65), we noted that ‘upward momentum is beginning to improve but USD has to close above 111.00 before a sustained advance can be expected’. USD subsequently rose to 111.10 before closing at 110.94. While USD did not close above 111.00, upward momentum has improved enough to indicate that USD is likely to head higher to 111.35. At this stage, the prospect for the expected advance to extend to 111.70 is not high. Overall, the current positive outlook is deemed intact as long as USD does not move below 110.40 (‘strong support’ level was at 110.05 yesterday).”
