USD/JPY still looks to 113.70 – UOB

FX Strategists at UOB Group remains neutral on the pair and still expect it to advance and test 113.70 in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday, “further USD advance is not ruled out but a sustained break of 113.50 seems unlikely”. USD subsequently rose to a high of 113.38 before staging a surprisingly sharp and rapid pullback. Upward pressure has clearly eased with the swift pullback and the 113.38 high is deemed as a short-term top and is not expected to come into the picture for now. From here, USD is likely to consolidate and trade sideways from here, expected to be between 112.60 and 113.20”.

Next 1-3 weeks: “USD touched a 3-1/2 high of 113.38 yesterday before easing off quickly. We continue to see scope for USD to test 113.70 but as highlighted yesterday, it is unclear if any up-move can be sustained. On the downside, a break of 112.60 is enough to indicate that the current upward pressure has eased. All in, the recent whippy price action has clouded the near-term outlook even though on a short-term basis, USD could test 113.70 first”.