USD/JPY sticks to the positive view – UOB

USD/JPY is still seen advancing further in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our expectation for USD to ‘trade sideways within a 106.00/106.70 range’ was incorrect as it rose to a high of 106.88 before settling on a firm note at 106.75 (+0.16%). Despite the advance, upward momentum remains lackluster. While USD could edge above the major resistance at 107.00 from here, it is unlikely able to maintain a foothold above this level (next resistance is at 107.35). On the downside, a beak of 106.45 would indicate the current upward pressure has eased.”

Next 1-3 weeks: “We turned positive USD last Thursday, 25 Feb when it was trading at 105.90. In our latest narrative from yesterday, we highlighted that ‘further USD strength is not ruled out’ and that ‘the next resistance is at 107.00’. USD subsequently rose to 106.88 and from here; a breach of 107.00 would not be surprising. That said, lackluster shorter-term momentum suggests the pace of any further advance is likely to be slow and the next resistance at 107.35 may not come into the picture so soon. Overall, the current positive outlook for USD is deemed intact as long as 106.00 (‘strong support’ level previously at 105.65) is not taken out.”