USD/JPY could extend the move to 110.00 and above – UOB

Quek Ser Leang of Global Economics & Markets Research at UOB Group assessed the recent price action in USD/JPY and noted it could still advance to the 110.00 region and beyond in the next weeks.

Key Quotes

“After about 2 months, USD/JPY finally moved above 109.30 as it rose to 109.48 yesterday (07 Nov). The break of this rather strong resistance is accompanied by solid momentum and the risk from here is for USD/JPY to advance further in the coming weeks. The next level to focus on is at the bottom of the Ichimoku cloud at 109.75. While 109.75 is a strong resistance level, the top of the cloud at 110.15 has added ‘strength’ as it coincides with the declining trend line connecting 114.20 (high in Nov 2018) and 112.40, the high in Apr this year”.

“There is ample room for the weekly RSI to advance further before reaching overbought levels and if USD/JPY were to move clearly above the cloud, it would suggest the August’s low of 104.44 could be a significant long-term bottom. Even based on the current technical considerations, the prospect for 104.44 coming back into the picture within these couple of months is rather low (106.47 is already a rather strong level).