USD/JPY bullish now, eyes 113.80 – UOB

FX Strategists at UOB Group remain bullish on the pair, expecting it to test the 113.80 region in the next weeks.

Key Quotes

24-hour view: “We underestimated the strength of USD up-move as it easily took out the 113.00 resistance to hit a high of 113.25. Despite the sharp pullback from the high, the undertone is still positive even though any up-move is expected to struggle to overcome 113.25 (minor resistance is at 113.10). Support is at 112.60 but only a move back below 112.35 would indicate that the current upward pressure has eased”.

Next 1-3 weeks: “Despite the sharp pull-back from a high of 113.25 yesterday, the strong daily closing is enough to suggest that USD has moved back into a bullish phase again. While upward momentum is not as impulsive as preferred, a move towards 113.80 would not be surprising. The next resistance is at the 114.49, the high in July. Positioning wise, those looking to enter long may like to wait for a dip to 112.35/40. Stop-loss is at 111.90”.