USD/JPY upward pressure could see a test of 111.70 – UOB

The pair could extend its upside momentum to the 111.70 region, noted FX Strategists at UOB Group.

Key Quotes

“We indicated last Friday that "a test of 111.30/35 is not ruled out but the major 111.70 resistance is unlikely to come into the picture". USD hit a high of 111.41 before dropping sharply. A temporary top is likely in place and the recent strong upward pressure has eased. The current movement is viewed as part of a consolidation phase and USD is expected to trade sideways for now, likely between 110.30 and 111.10”

“While the outlook for USD is still deemed as neutral, upward momentum has improved further and we continue to hold the view that the immediate USD strength has room to extend higher to 111.70. A clear break above this level would be a good indication that USD has moved into a bullish phase. This scenario would not be surprising as long as the short-term key support at 110.30 is intact”.