USD/JPY eyes a probable test of 110.00 – UOB

The pair’s neutral bias remain in well in place, while a test of 110.00 appears on the cards, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “The expectation for USD to extend its gains to 109.70 did not materialize as it traded sideways yesterday within a 109.04/109.46 range. The recent upward momentum has eased considerably and the immediate bias is tilted to the downside. That said, any weakness is viewed as part of a lower 108.90/109.50 consolidation range and not the start of a sustained down-move”.

Next 1-3 weeks: “The 109.30 ‘target’ that was first highlighted on Tuesday (24 Apr, 108.70) was exceeded as USD hit a high of 109.45 during NY hours. As indicated previously, a break of 109.30 would suggest that USD is ready for a move to 110.00. We attach high importance to 110.00 as a clear break of this level would indicate that USD has likely made a significant low at 104.55 last month. In the meanwhile, we continue to expect USD to stay supported and only a break of 108.45 (‘key support’ previously at 108.15) would indicate that a top is in place”.