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FX Strategists at UOB Group keep the constructive view on USD/JPY and see a probable move to the 109.00 region in the near term.

Key Quotes

24-hour view: “While our view for a stronger USD last Friday was correct, the subsequent advance exceeded our expectation as it managed to crack the strong 108.50 level and touched a 2-1/2 month high of 108.61. The rally is running ahead itself and for today, further USD strength is unlikely. USD is more likely to consolidate its gains and trade sideways at these higher levels, expected to be between 108.00 and 108.60″.

Next 1-3 weeks: “We indicated last Friday (11 Oct, spot at 107.85) that the top of our expected sideway trading range at 108.50 “is more vulnerable” and added, “a break of this strong level could sent USD to 109.00″. However, the rapid manner by which USD cracked 108.50 was not exactly expected (USD touched 108.61 during NY hours on Friday). While the advance appears to be running ahead of itself, the risk is for further USD strength to 109.00. Only a break of 107.50 would suggest the current upward pressure has eased”.