USD/JPY could test the 107.70 area once 107.35 is cleared in the near-term, assessed FX Strategists at UOB Group.
24-hour view: “Our expectation for USD to ‘trade between 106.50 and 106.95’ was wrong as it rose to a high of 107.15. While the advance appears to be struggling to maintain its momentum, USD could continue to edge higher. That said, the major resistance at 107.35 is likely out of reach. Support is at 106.85 followed by 106.70.”
Next 1-3 weeks: “There is not much to add to update from Tuesday (02 Mar, spot at 106.80). As highlighted, the ‘outlook for USD is still positive’ but ‘lackluster shorter-term momentum suggests a slow pace of advance and 107.35 may not come into the picture so soon’. Looking ahead, a clear break of 107.35 would shift the focus to 107.70. On the downside, a break of 106.40 (‘strong support’ level previously at 106.00) would indicate that the positive phase in USD that started late last week has run its course.”
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