USD/JPY could still attempt to reach the 113.00 handle and above in the near term, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday, “USD is expected to grind higher but expect solid resistance at 113.15″. USD popped to a high of 113.13 after FOMC’s announcement before dropping back quickly. While the 113.13 high is deemed as a short-term top, it is too early to expect a sustained pull-back. From here, we expect USD to stay under mild downward pressure and could drift lower towards the 112.40 support. At this stage, a clear break below this level is not expected (next support is at 112.15)”.
Next 1-3 weeks: “USD came very close to the July’s peak near 113.15 as it briefly hit a high of 113.13 during NY hours. The up-move was short-lived as it dropped back sharply to a low of 112.61. We highlighted on Tuesday (25 Sep, spot at 112.80) that “a break above 113.15 would not be surprising”. Despite the relatively weak daily closing (NY close of 112.72, -0.22%), we still see chance for USD to move above 113.15. That said, upward has been dented and the probability for a break of the next resistance at 113.45 is not high. Only a break of 112.15 (no change in ‘key support’) would indicate that a short-term top is in place”.
Share
