USD/JPY: Next on the upside comes 115.80 – UOB

USD/JPY looks ready to advance to the 115.80 region ahead of a breakout of 116.00, commented FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong surge in USD to 115.48 came as a surprise (we expected USD to strengthen but we were of the view that 115.05 is likely out of reach). While the advance is overbought, strong upward momentum could lead further USD strength. That said, it is left to be seen if USD can maintain a foothold above 115.80. On the downside, a breach of 115.00 (minor support is at 115.20) would indicate that the upward pressure has eased.”

Next 1-3 weeks: “We highlighted yesterday (27 Jan, spot at 114.65) that risk has shifted to the upside. We added, USD ‘has to clear 115.05 before a sustained advance is likely’. USD subsequently blew past 115.05 and surged to 115.48. The price actions suggest USD is ready to head higher to 115.80, possibly 116.05. The upside risk is intact as long as USD does not move below 114.80 (‘strong support’ level was at 114.05 yesterday).”