Home USD/JPY: rising bets for a test of 107.90 – UOB
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USD/JPY: rising bets for a test of 107.90 – UOB

The up move in USD/JPY carries the potential to extend to the 107.90 region in the near term, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “While our expectation for a higher USD was not wrong, we underestimated the strength of the advance as it blew past 106.70 and hit a 5-week high of 107.22. The rally appears to be running ahead of itself and while a move above 107.22 is not ruled out, a break of 107.50 appears unlikely. On the downside, a break of 106.60 (minor support at 106.80) would indicate that the current upward pressure has eased”.

Next 1-3 weeks: “After trading in an ‘undecided’ manner for several days, USD surged above the top of our expected 105.00/107.00 sideway trading range (high of 107.22). Despite the relatively strong advance, upward momentum has not improved by that much. For now, we view the current movement as a ‘rebound’ that has scope to extend to 107.90. At this stage, the prospect for a sustained rise above 107.90 is not high. On the downside, a break of the strong 106.30 support would indicate the current upward pressure has eased”.

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