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The upside momentum in USD/JPY could see the 107.90 tested in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to trade sideways between 106.70/107.20 yesterday. However, after touching 106.75, USD rose to 107.26 before ending the day on a firm note at 107.23 (+0.31%). The advance has scope to extend higher but any advance is expected to face strong resistance at 107.55 (the next resistance at 107.90 is unlikely to come into the picture for now). Support is at 107.00 followed by yesterday’s 106.75 low”.

Next 1-3 weeks: “USD closed on a firm note and at a 6-week high of 107.23 (+0.31%) yesterday (09 Sep). The price action reinforces our view from last Friday (06 Sep, spot at 107.00) wherein the “rebound in USD has scope to extend to 107.90″. While the prospect for a sustained rise above 107.90 is still not that high, it would continue to improve as long as 106.30 is intact (no change in strong support level). On a shorter-term note, 106.75 is already a strong support level”.