USD/JPY: Further upside likely above 107.00 – UOB

FXStreet reports that a breakout of the 107.00 mark should allow USD/JPY to climb further in the near-term, suggested FX Strategists at UOB Group.

24-hour view: “Yesterday, we highlighted that USD ‘could edge higher towards 106.25’ but held the view that ‘a sustained advance above this level is not expected’. The subsequent pace and extent of USD strength exceeded our expectation as it soared to an overnight high of 106.57. While the rapid advance appears to be running ahead of itself yet, there is no sign of weakness just yet. From here, there is room for USD to test the major resistance at 106.70 but a clear break of this level is unlikely (next resistance is at 107.00). Support is at 106.15 followed by 105.90.”

Next 1-3 weeks: “We highlighted on Monday (24 Aug, spot at 105.80) that USD ‘is still in a consolidation phase and is expected to trade between 105.00 and 106.70’. Upward momentum is beginning to improve as USD rose to a high of 106.57 yesterday. While a move above 106.70 is not ruled out, further USD strength is likely only if it closes above the major resistance at 107.00. At this stage, the prospect for such a scenario is not high but it would increase as long as USD does not move below 105.60 within these few days.”