USD/JPY stays neutral and points to a test of 110.00 and above – UOB

FX Strategists at UOB Group remain neutral on spot, while a test of the 110.45/50 band appears in the pipeline near term.

Key Quotes

24-hour view: “USD tried but failed to break clearly above 110.00 yesterday. The subsequent swift reversal from a high of 110.01 appears to be running ahead of itself. While a dip below the overnight low of 109.29 would not be surprising, we do not expect a move below the next support 109.00. Resistance is at 109.70 followed by the still very strong level of 110.00”.

Next 1-3 weeks: “USD tried but failed to move convincingly above 110.00 (high of 110.01 yesterday). Despite the pull-back from the high, there is still chance for USD to test the strong 110.45/50 resistance (before a more sustained pull-back can be expected). Only a break of 109.00 would indicate that the current mild upward pressure has eased”.