USD/JPY outlook shifted to bullish – UOB

FX Strategists at UOB Group now expects the pair to test the boundaries of 111.00 in the next 1-3 weeks.

Key Quotes

24-hour view: “We expected USD to move higher yesterday but were of the view that the “next resistance at 110.65 could be out of reach”. USD edged above this strong resistance and touched a high of 110.69 before ending the day on a strong note. That said, the strong rally over the past few days appears to be tiring and while a retest of 110.70 is not ruled out, the next major resistance at 110.95/00 is unlikely to yield so easily. On the downside, a move back below 109.95 would suggest that a temporary top is in place. Minor support is at 110.25”.

Next 1-3 weeks: “We just turned bullish USD yesterday and there is no change to the view. As highlighted, the strong rally over the past few days appears to be running ahead of itself even though further extension to 110.95 would not be surprising (next resistance is at 111.50). Stop-loss is raised to 109.50 from 109.20. The buy level suggested at 109.75/80 is not met (low has been 109.90) and it looks like we have missed the ideal buying opportunity”.