The upside momentum seems unchanged in USD/JPY and could still target the key resistance in the mid-107.00s, suggested FX Strategists at UOB Group.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the pullback from the high has room to edge lower but any weakness is viewed as part of 106.45/107.00 range’. However, USD only touched 106.55 before edging to a high of 107.04. Upward momentum has improved a tad and for today, USD could move above the strong resistance at 107.15. The next resistance at 107.50 is unlikely to come into the picture. On the downside, support is at 106.75 followed by 106.50.”
Next 1-3 weeks: “On Wednesday (12 Aug, spot at 106.50), we noted the ‘rapid improvement in momentum’ and expected USD to ‘strengthen towards 107.15’. USD rose to a high of 107.04 yesterday (13 Aug) and from here, a move above 107.15 would not be surprising. The next resistance at 107.50 is a more formidable level and may not be easy to break. Overall, the current positive phase in USD is deemed as intact as long USD does not move below 106.20 (‘strong support’ level was previously at 105.85).”
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