USD/JPY still bullish, extra USD strength difficult – UOB

FX Strategists at UOB Group remain bullish on the pair, although extra USD strength appears unlikely in the next weeks.

Key Quotes

24-hour view: “USD edged above the top of our expected 112.45/113.10 consolidation range but eased off quickly after touching a high of 113.19. Indicators are mostly ‘flat’ now which suggest that USD has moved into a consolidation phase. Expected range for today; 112.50/113.05”.

“Despite overall bullish indications, USD has not been able to make much headway and has struggled to maintain a foothold above 113.00. Upward momentum has been dented and the odds for further extension to 113.80 have diminished. However, only a move below 112.20 (stop-loss level unchanged) would indicate that the bullish phase that started last Friday (see update on 28 Sep) has ended. Positioning wise, those are long from 112.40 may like to exit half of their position at the current level of 112.75”.