USD/JPY faces potential upside to the 104.75 area – UOB

USD/JPY keeps the positive view and could attempt a move to the 104.75 in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday USD ‘could move above the month-to-date high near 104.40’. We added, ‘a rise beyond 104.75 is unlikely’. Our view was not wrong as USD eased from 104.46 and closed at 104.21. USD rose sharply after opening this morning and the rapid pick-up in momentum suggests that USD could strengthen further but the odds for sustained advance above 104.75 are not high. For today, the next resistance at 105.00 is unlikely to come into the picture. Support is at 104.25 followed by 104.00.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (28 Jan, spot at 104.25). As highlighted, ‘risk for USD has shifted to the upside but the solid resistance at 104.75 may not yield so easily’. The positive outlook is deemed intact as long as USD does not move below 103.75 (‘strong support’ level was at 103.50 yesterday). Looking ahead, the next resistance above 104.75 is at 105.00.”