USD/JPY: Upward momentum gathers traction – UOB

There is the chance that USD/JPY could pick up pace and test the 108.40 region in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “While our expectation for JPY to strengthen yesterday was correct, our view that ‘107.80 is likely out of reach’ was not as JPY soared to a high of 107.87. Upward momentum has improved further and for today, the risk remains on the upside. From here, barring a move below 107.30, JPY could edge above 108.00. The next resistance at 108.40 is not expected to come into the picture for today.”

Next 1-3 weeks: “USD moved above the top of our expected 106.40/107.80 range yesterday (high of 107.87). Upward momentum is beginning to improve and USD could strengthen towards 108.40. As the build-up in momentum is still in its nascent stage, it is too early to expect a sustained move towards 108.40. On the downside, a breach of 107.00 (‘strong support’ level) would indicate that the current upward pressure has eased.”