USD/JPY increasing odds for a test of 112.00 and beyond – UOB

The pair has now accelerated its chances of reaching the key 112.00 handle and above in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Expectation for sideway trading was wrong as USD rose strongly to hit a high of 111.64 before ending the day on a solid note (NY close of 111.62). While the swift up-move appears to be running ahead of itself, there no sign of weakness just yet and a move above the late August high of 111.82 would not be surprising. However, a break of the next major resistance at 112.15 is not expected. On the downside, only a break of 111.15 would indicate that a short-term top is in place (minor support is at 111.35)”.

Next 1-3 weeks: “While the rapid pace and extent of the rebound from last week’s 110.37 low was surprising, we are not convinced that USD is ready for a directional move. However, short-term underlying tone has clearly improved and the immediate pressure is on the upside and the probability for a test of last month’s peak near 112.15 has increased. At this stage, we do not anticipate a sustained move above this level. On the downside, only a break of 110.85 would indicate that the current mild upward pressure has eased”.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.