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USD/JPY looks firm and could extend the move to 106.50 in the near-term, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to test 106.25 did not materialize as it traded in a muted manner between 105.90 and 106.10. The underlying tone has weakened somewhat and while further consolidation would not be surprising, USD is likely to trade within a lower range of 105.70/106.05.”

Next 1-3 weeks: “After trading within a 105.00/105.75 range for more than a week, USD popped to a high of 106.10 yesterday (07 Oct) before closing on a firm note at 105.96. Upward momentum has improved, albeit not by all that much. From here, USD is expected to trade with an upward bias towards 106.50. At this stage, the odds for a sustained rise above this level are not high. On the downside, a break of 105.40 (‘strong support’ level) would indicate that our view for a higher USD is wrong.”