USD/JPY faces the next target at 111.00 – UOB

The upside momentum in USD/JPY could push the pair to the 111.00 area in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted last Friday that ‘the USD rally has scope to extend to 110.55 but is unlikely to threaten the next resistance at 110.80’. Our view for USD to strengthen was not wrong even though the advance came close to taking out 110.80 (high of 110.79). In view of the strong momentum, further USD strength is not ruled but overbought conditions indicate that a break of 111.00 is unlikely. On the downside, a break of 110.35 (minor support is at 110.50) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We turned positive USD last Friday (24 Sep, spot at 110.30) even though we held the view that that the major resistance at 110.80 may not come into the picture so soon. We did not anticipate the rapid manner by which USD approaches 110.80 as it rose to 110.79 during NY session. While overbought, the current USD strength could extend to 111.00, with lower odds for extension 111.20. The positive outlook is deemed intact as long as 109.95 (‘strong support’ level was at 109.65 last Friday) is not breached.”