USD/JPY: Upside momentum improves – UOB

According to FX Strategists at UOB Group, USD/JPY could move higher once 110.90 is cleared.

Key Quotes

24-hour view: “Our expectation for USD to ‘trade sideways between 109.95 and 110.40’ was incorrect as it rose to 110.58 before settling on a firm note at 110.54 (+0.36%). Upward momentum has improved, albeit not by much. For today, there is scope USD to move to 110.70 but the next resistance at 110.90 is unlikely to come under threat. On the downside, a breach of 110.15 (minor support is at 110.30) would indicate that the current mild upward pressure has eased.”

Next 1-3 weeks: “Our latest narrative was from last Thursday (22 Jul, spot at 110.20) where we highlighted that the outlook is mixed and USD could trade within a 109.50/110.70 range for now. USD subsequently edged higher and upward momentum is beginning to improve. A breach of 110.70 would not be surprising but USD has close above 110.90 before a sustained advance can be expected. The prospect for USD to close above 110.90 is not high for now but would remain intact as long as USD does not move below 109.90 within these few days.”