USD/JPY now faces the next hurdle at 116.70 and 117.00 – UOB

Extra gains in USD/JPY could extend further and initially test the 116.70 level ahead of 117.00 in the next weeks, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘upward momentum still appears to be on the firm side and we see chance for USD to advance’. We added ‘any advance is still unlikely to challenge the major resistance at 116.30’. USD subsequently rose to 116.19 before closing at 116.13. During early Asian hours, USD moved above 116.30 and the steadily improving momentum is likely to lead to further USD strength to 116.50, possibly 116.70. Support is at 116.10 followed by 115.90.”

Next 1-3 weeks: “We highlighted yesterday (10 Mar, spot at 115.90) that shorter-term upward momentum is beginning to build but USD has to break the major resistance at 116.30 before a sustained advance is likely. USD rose above 116.30 during early Asian hours and the rapidly improving momentum suggests further advance. Resistance levels are at 116.70 followed by 117.00. On the downside, a breach of 115.60 (‘strong support level) would indicate that our view for a higher USD is incorrect.”