USD/JPY remains bullish, still targets 114.50 – UOB

In view of FX Strategists at UOB Group, the pair’s outlook remains bullish with the next target in the mid-114.00s in the short term.

Key Quotes

24-hour view: “We highlighted last Friday that USD has scope to extend higher and test the major 114.50 resistance. USD only managed to touch a high of 114.44 before selling pressure drove it sharply lower. The down-move from the high has room to extend lower but a sustained move below 113.30 seems unlikely for now (next support is at 113.00). Resistance is at 114.00 followed by 114.30 (the 114.44 high is not expected to come into the picture)”.

Next 1-3 weeks: “While we have maintained a bullish view on USD, we highlighted in recent updates that “114.50 is a major level and is expected to offer solid resistance”. USD touched a high of 114.44 last Friday but retreated quickly and closed in NY on a rather weak note. In order to maintain the current bullish phase, USD has to crack 114.50 relatively soon (say within these 2 to 3 days) as a prolonged consolidation at these higher levels would lead to a rapid loss in upward momentum. On the downside, a break below 113.30 (stop-loss level unchanged) would indicate that an interim top is in place”.