USD/JPY likely to test 110.50 near term – UOB

FX Strategists at UOB Group, the pair could test the top of the range near the mid-110.00s.

Key Quotes

24-hour view: “The sudden surge in USD last Friday came as a surprise. While the strong advance appears incomplete, a break above the major 110.10 resistance seems unlikely (109.85 is already quite a strong level). On the downside, only a move back below 109.05 would indicate that the current upward pressure has eased (minor support is at 109.30)”.

Next 1-3 weeks: “The strong bounce in USD last Friday has put paid to our recent expectation for a deeper pull-back to 107.90. The robust rebound suggests that USD has likely found a short-term bottom at 108.10 last week. However, there is no change to the current neutral outlook even though the immediate bias is for USD to probe the top of the expected 108.50/110.50 consolidation range”.