USD/JPY: A move to 116.50 loses traction – UOB

An advance to the mid-116.00s in USD/JPY seems to have been losing momentum as of late, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Last Friday, we expected USD to trade sideways between 115.55 and 116.20. USD subsequently traded between 115.50 and 116.04 before settling on a soft note at 115.55 (-0.23%). The weakened underlying tone suggests USD could drift lower but a break of the strong support at 115.30 is unlikely. Resistance is at 115.80 followed by 116.00.”

Next 1-3 weeks: “We highlighted last Friday (07 Jan, spot 115.95) that while upward momentum has eased somewhat, only a breach of 115.30 (no change in ‘strong support’ level) would indicate that USD is not ready to head higher to 116.50. There is no change in our view for now even though after the soft daily closing last Friday, the prospect for USD to advance to 116.50 has diminished.”