USD/JPY: Extra gains expected above 105.05 – UOB

USD/JPY faces further upside once 105.05 is cleared in the short-term horizon, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view for USD to ‘dip below 113.60’ yesterday was incorrect as it surged to a high of 114.69 before closing on a strong note at 114.63 (+0.68%). Strong upward momentum suggests further USD strength even though the major resistance at 115.05 is likely out of reach for today (there is another resistance at 114.90). Support is at 114.50 followed by 114.25.”

Next 1-3 weeks: “We have held the same view since last Friday (21 Jan, spot at 113.90) where USD ‘has to break 113.40 before a decline to 113.00 is likely’. USD subsequently dropped to 113.46 but yesterday (26 Jan) it surged above our ‘strong resistance’ level at 114.45 (high of 114.69). The rapid improvement in upward momentum has shifted the risk to the upside. However, USD has to clear the major resistance level at 115.05 before sustained advance is likely. The upside risk is intact as long as USD does not move below the ‘strong support’ level, currently at 114.05.”