USD/JPY expected to test the 109.30 area – UOB

USD/JPY keeps the upside bias unchanged and FX Strategists at UOB Group believe it could reach the 109.30 region in the next weeks.

Key Quotes

24-hour view: “Our view for the pullback in USD to extend lower was incorrect as it surged to 109.21 before easing off. Despite the pullback, the underlying tone is still firm and there is chance for USD to test the major resistance at 109.30. For today, a clear break of this level is unlikely. The next resistance at 109.60 is not expected to come into the picture. Support is at 108.70 followed by 108.50.”

Next 1-3 weeks: “Two days ago (28 Apr, spot at 108.80), we turned positive on USD and expected it to ‘trade with an upward bias towards 109.30’. USD rose to 109.21 yesterday (29 Apr) and there is no change in our view. Looking ahead, a clear break of 109.30 would suggest USD could strengthen further to 109.60. On the downside, a breach of 108.20 (‘strong support’ level previously at 108.00) would indicate that the positive phase has ended.”