USD/JPY upside could be losing momentum – UOB
The upside momentum in USD/JPY appears to be running out of steam, noted FX Strategists at UOB Group.
Key Quotes
24-hour view: “USD traded between 108.45 and 108.93 yesterday, lower than our expected sideway-trading range of 108.50/109.00. The underlying tone has weakened and the risk for today is tilted to the downside. From here, barring a move above 109.00 (108.85 is already quite a strong level), USD is expected to weaken to 108.35, possibly 108.10”.
Next 1-3 weeks: “USD eked out a fresh high of 108.93 before retreating to end the day slightly lower at 108.65 (-0.09%). For now, there is no change in our view from Wednesday (16 Oct, spot at 108.80) wherein the positive USD outlook is still intact and a break of 109.00 would shift the focus to 109.30. However, as highlighted, in view of overbought conditions, USD could ill afford to dither as a consolidation at these elevated levels would quickly increase the risk of short-term top. From here, unless USD cracks 109.00 and stays above this level by end of today’s NY session, a breach of 108.10 (no change in ‘strong support’ level) would indicate a short-term top is in place. In other words, the odds for further USD strength have diminished”.
Author
Pablo Piovano
FXStreet
Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.
