USD/JPY faces strong resistance around 109.75 – UOB
|The up move in USD/JPY is seen meeting a tough barrier at 109.75 in the short-term horizon, in opinion of FX Strategists at UOB Group.
Key Quotes
24-hour view: “The rapid deceleration in upward momentum came as a surprise as USD traded in a relatively quiet manner within a 108.84/109.24 range (we were expecting a move above 109.30). Momentum indicators are ‘flat’ now and USD is likely to trade sideways to slightly lower, expected to be between 108.70 and 109.10”.
Next 1-3 weeks: “While we changed our view for USD to “trade sideways” yesterday (05 Nov, spot at 108.60), the rapid surge that quickly approaches the top of the expected range at 109.30 came as a surprise (overnight high of 109.24). The rapid rise and the subsequent strong daily closing at 109.15 (the +0.54% gain is the largest 1-day advance in 1-1/2 months) suggest that a move above the August peak of 109.30 would not be surprising. However, there is a solid resistance at 109.75 and at this stage, the prospect a rise above this level within the next couple of weeks is not high. All in, USD is expected to trade with a firm footing from here as long as 108.45 (‘strong support’ level) is intact”.
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