USD/JPY a test of 108.00 appears unlikely – UOB

FX Strategists at UOB Group believe there is less room for a test of the 108.00 handle in the next weeks.

Key Quotes

“While we highlighted that 108.00 is a major support and is unlikely to yield so easily, the strong rally from a low of 108.11 was unexpected. The up-move appears to have scope to extend higher but the pace of any advance is expected to be slower. From here, a move above the strong 109.30 resistance would not be surprising but the next resistance at 109.80 is unlikely to come into the picture, at least not for today”.

“The sudden swing higher ahead of the major 108.00 level (low of 108.11) was unexpected. While the stop-loss for the bearish view at 109.30 is still intact, a move above this level would not be surprising. USD has to move and stay below 108.75 within these 1 to 2 days or the odds for another leg lower towards 108.00 would continue to diminish”.