The upside momentum in USD/JPY could see the 106.00 level (and above) retested in the short-term horizon, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to “trade sideways between 104.80 and 105.55” yesterday. While USD traded sideways as expected, the registered range was narrower than anticipated (104.99/105.67). The underlying has firmed somewhat and this could lead to USD testing the 105.75 resistance first before a pullback can be expected. For today, the major resistance at 106.10 is likely out of reach. Support is at 105.20 followed by 105.00.”

Next 1-3 weeks: “There is not much to add to our update from Tuesday (10 Nov, spot at 105.15). As highlighted, there is “room for the current strong advance in USD to test the major resistance at 106.10”. At this stage, the odds for a sustained rise above this level are not high. On the downside, a break of 104.40 (‘strong support’ level previously at 104.00) would indicate that USD is not ready for 106.10.”

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