USD/JPY: Probable surpass of 110.55 near term – UOB

USD/JPY could attempt a surpass of the 110.55 level in the short-term horizon, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that USD ‘could test 110.35’ and we were of the view that ‘the major resistance at 110.55 is unlikely to come under threat’. Our view was not wrong as USD rose 110.41 before retreating quickly. Upward pressure has dissipated and the current movement is deemed as part of a consolidation phase. In other words, USD is likely to trade sideways today, expected to be within a 109.75/110.30 range.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (01 Sep, spot at 110.10). As highlighted, the risk for USD to break the top of our expected range at 110.55 has increased. The risk of a break of 110.55 would continue to increase as long as USD does not move below 109.50 within these few days. Looking ahead, a break of 110.55 would shift the focus to 110.80.”