Rising bets for a move above 110.55 – UOB

USD/JPY is now expected to attempt a surpass of the 110.55 level in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to ‘trade sideways within a 109.75/110.10 range’ yesterday. However, USD dropped briefly to 109.57 during NY session before rebounding strongly. USD traded on a firm note during early Asian hours and the build-up in momentum could lead to a test of 110.35. The major resistance at 110.55 is unlikely to come under threat. Support is at 109.90 followed by 109.70.”

Next 1-3 weeks: “We have expected USD to trade within a 109.30/110.55 range since 19 Aug (spot at 109.90). Our view was not wrong as USD traded within the range for the past two weeks. Shorter-term momentum is beginning to build and the risk for USD to break the top of our expected range at 110.55 has increased. The risk of a break of 110.55 would continue to increase as long as USD does not move below 109.50 within these few days. Looking ahead, a break of 110.55 would shift the focus to 110.80.”