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USD/JPY is still expected to move to the 110.40 area in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further USD strength appears unlikely’ and added, ‘USD is more likely to consolidate and trade between 108.40 and 109.30’. USD subsequently traded between 108.65 and 109.27, narrower than our expected range. The price action is still viewed as part of a consolidation phase. However, the slightly weakened underlying tone suggests a lower trading range of 108.35/109.20 for today.”

Next 1-3 weeks: “We highlighted last Friday (03 Apr, spot at 108.00) that ‘risk of a short-term bottom has increased’. The breach of the 108.75 ‘strong resistance’ level earlier this morning indicates that last Tuesday (01 Apr) low of 106.89 is a short-term bottom. The near-term bias is for USD to test the 110.40 level from here. A clear break of this level would indicate USD could extend towards last month’s top at 111.71. On the downside, only a breach of 107.30 (‘strong support’ level) would indicate that the current upward pressure has eased.”