USD/JPY a test of 111.60/55 not ruled out – UOB

A new visit to the mid-111.00s in the near term has not been ruled out, suggested FX Strategist at UOB Group.

Key Quotes

“While the failure to move clearly below 111.90 was not surprising (low of 111.89), the subsequent strong rally from the low was unexpected. The up-move appears to have scope to extend higher but 113.00 is expected to offer solid resistance, ahead of the much stronger level near 113.30”.

“USD retested last Friday 111.91 low but rebounded strongly after touching 111.89. Despite the recovery, the undertone is still negative and there is still room for another leg lower to test the major 111.55/60 support (even though the odds have diminished). At this stage, a sustained move below this major support seems unlikely. On the upside, only a clear move back above 113.00 would indicate that the short-term downward pressure has eased”.