USD/JPY faces extra gains above 115.80 – UOB

UOB Group’s FX Strategists now see USD/JPY accelerating its gains on a break above 115.80 in the short-term horizon.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘despite the advance, upward momentum has not improved by all that much and USD is unlikely to advance much further’ and we expected USD to ‘trade sideways between 115.25 and 115.70’. Our view was not wrong even though USD traded within a narrower range than expected (115.30/115.67). For today, further sideway-trading would not be surprising but the slightly firmed underlying tone suggests a higher range of 115.40/115.80.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (09 Feb, spot at 115.45). As highlighted, while upward momentum has improved somewhat, USD has to break 115.80 before a sustained advance can be expected. The chance of USD breaking 115.80 is not high for now but it would remain intact as long as 115.00 is not breached (‘strong support’ level was at 114.80 yesterday). Looking ahead, the next resistance above 115.80 is at 116.10 followed by 116.35.”