USD/JPY now looks to 110.00 and possibly above – UOB

In light of the ongoing price action, USD/JPY could move to levels above the 110.00 handle, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to trade sideways between 109.30 and 109.65 last Friday. USD subsequently traded in a quiet manner within a 109.38/106.66 range before ending the day little changed at 109.51 (+0.01%). The underlying tone has improved and this could lead to test of the strong 109.75 resistance. For today, a sustained rise above this level appears unlikely (next resistance is at 110.00). On the downside, only a move below 109.30 would indicate that the current mild upward pressure has eased”.

Next 1-3 weeks: “USD eked out a 6-month high of 109.66 last Friday before closing largely unchanged at 109.51 (+0.01%). The price action was not out of line with our view from last Thursday (28 Nov, spot at 109.40) wherein ‘upward momentum has improved’ and the ‘focus is at 109.75’. As highlighted, a clear break of 109.75 would greatly increase the prospect for USD to move above the next resistance at 110.00. All in, USD is expected to stay firm unless it moves below 109.10 (‘strong support’ level previously at 108.80)”.