In opinion of FX Strategists at UOB Group, USD/JPY could extend the rebound to the key 110.00 barrier and beyond.
Key Quotes
24-hour view: “Last Friday, we expected but underestimated the strength in USD as it burst above the strong 109.35 level and hit a high of 109.84 before easing off quickly. The combination of overbought conditions and waning momentum suggests that 109.84 could be an interim top. For today, USD could edge lower but any weakness is viewed as part of an overall 109.10/109.75 consolidation range and a sustained decline below 109.10 is not expected.”
Next 1-3 weeks: “While we held a positive a view in USD since middle of last week, it appears that we have underestimated its strength. We highlighted last Friday (05 Jun, spot at 109.05) that ‘109.70 is unlikely to come in the picture so soon’ but USD surged past 109.70 easily and hit a high of 109.84. Upward momentum has received a strong boost and from here, the next level to focus at is at 110.00 followed by 110.30. That said, overbought shorter-term conditions could lead to a couple of days of consolidation first. Overall, the positive phase in USD is deemed as intact unless the ‘strong support’ at 108.55 is breached (‘strong support’ level was at 108.30 last Friday).”
Share
