USD/JPY is seen pushing further north of the 109.00 handle in the next weeks, according to FX Strategists at UOB Group.
24-hour view: “Expectation for USD to “edge above 109.00” did not materialize as it traded in a surprisingly subdued manner between 108.55 and 108.86. Momentum indicators are neutral and USD is likely to continue to trade sideways, expected to be between 108.00 and 108.50”.
Next 1-3 weeks: “We highlighted on Monday (14 Oct, spot at 108.35) that “while the advance appears to be running ahead of itself, the risk is for further USD strength to 109.00”. USD soared to 108.89 yesterday (15 Oct) before ending the day on a solid note at 108.84. The positive outlook is still clearly intact and if USD were to break above 109.00, the next level to focus on is at the August’s peak near 109.30. In view of the overbought conditions, USD could ill afford to dither as a consolidation at these elevated levels would quickly increase the risk of a short-term top. On the downside, a break of 108.10 (‘strong support’ level previously at 107.50) would indicate the current upward pressure has eased”.
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