USD/JPY faces extra gains above 111.95 – UOB

Extra gains in USD/JPY are seen on a close beyond 111.95, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for USD to ‘trade sideways between 110.80 and 111.25’ yesterday was incorrect as it soared to 111.55. The rapid advance has room to extend and a break of the major resistance at 111.70 would not be surprising. That said, the next major resistance at 111.95 is unlikely to come under threat. Support is at 111.30 followed by 111.10.”

Next 1-3 weeks: “On Monday (04 Oct, spot at 111.00), we highlighted that the recent USD strength has come to an end and we expected USD to trade between 110.30 and 111.70. We did not anticipate the rapid manner by which USD is approaching 111.70. Shorter-term upward momentum is beginning to build and a break of 111.70 would not be surprising. However, USD has to close above 111.95 before a sustained advance can be expected. At this stage, the prospect for USD to close above 111.95 is not high but it would increase as long as USD does not move below 110.90 within these couple of days. Looking ahead, if USD closes above 111.95, the chance for it to move to 112.20 would increase considerably.”