USD/JPY sticks to the corrective phase – UOB

USD/JPY faces potential extra gains on a break above the 106.00 mark, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘there is room for USD to edge higher but a sustained rise above the major 105.75 resistance is unlikely’. Our expectation did not materialize as USD traded in a quiet manner between 105.19 and 105.52 before closing little changed at 105.40 (+0.03%). The price action offers no fresh clues but the underlying tone still appears to be slightly positive. Overall, USD could continue to trade in a quiet manner, likely between 105.25 and 105.75.”

Next 1-3 weeks: “There is not much to add to our update from Wednesday (23 Sep, spot at 105.05). As highlighted, the recent negative phase has run its course and USD is in the early stages of a correction phase. There is room for USD to edge higher but any advance is viewed as part of 104.75/105.75 range (narrowed from 104.25/105.75 previously). While a move above 105.75 would not be surprising, USD has to break 106.00 before a sustained advance can be expected.”