In view of FX Strategists at UOB Group, USD/JPY is noe targeting the 108.50 region in the near term.
24-hour view: “The strong surge in USD that touched 108.01 came as a surprise. The rapid rise has picked up considerable momentum and USD could extend its advance to 108.20. The major 108.50 level is unlikely to come into the picture. Support is at 107.55 but the stronger level is at 107.30”.
Next 1-3 weeks: “We indicated yesterday (10 Oct, spot at 107.20) that USD has “moved back into a sideway-trading phase” and is expected to trade between the two major levels of 106.50 and 108.50. While there is no change to our view, the strong advance of +0.46% (107.96) yesterday was not exactly expected. The price action suggests 108.50 is vulnerable and a break of this strong level could sent USD to 109.00 (note that 108.50 was tested in Sep and earlier this month and held both times). At this stage, the prospect for such a scenario is not high but it would increase quickly as long USD can hold above 107.00 within these few days”.
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