USD/JPY could test 110.90/95 as long as 108.80 underpins – UOB

According to FX Strategists at UOB Group, the pair could extend the upside to the boundaries of the 111.00 handle while remains supported by 108.80 in the near term.

Key Quotes

24-hour view: “In line with expectation, USD re-tested the 108.30/35 support. However, the subsequent sharp rally from a low of 108.25 that surged to an overnight high of 109.89 was clearly unexpected (several strong resistances were taken out along the way). The up-move appears to be running ahead of itself even though a test of the next resistance at 110.05/10 would not be surprising (next resistance is at 110.35). Support is at 109.40 followed by 109.10”.

“The call to wait for a daily closing below 108.55 before shifting to a bearish stance was appropriate as USD surged after touching a low of 108.25 (holding above the year-to-date low near 108.10). The recent downward pressure has clearly eased and the immediate bias is tilted to the upside towards the 110.90/95 high seen two weeks ago. At this stage, a sustained move above this level is not expected. While the prospect for such a move are not high for now, it would continue to improve as long as the short-term key support at 108.80 is not taken out in the coming days”.