USD/JPY bullish above 110.00 – UOB

The pair’s outlook should shift to bullish on a close above the 110.00 handle, according to FX Strategists at UOB Group.

Key Quotes

24-hour view: “The strong surge in USD appears incomplete and a break of the strong 110.00 level could lead to a quick ‘pop’ higher to 110.20. The next resistance near 110.50 is another major level and is likely out of reach for today. Support is at 109.60 but only a move below 109.30 would indicate that the current strong upward pressure has eased”.

Next 1-3 weeks: “In our latest update on Thursday (26 Apr, spot at 109.40), we highlighted that the break of 109.30 has shifted to focus to 110.00. We indicated that 110.00 is of high importance and a break of this level would suggest that USD has likely made a significant low at 104.55 last month. Since then, the outlook for USD has improved further and from here, a NY close above 110.00 would indicate the start of a bullish phase (with an immediate target of 110.50 followed by 111.00). The prospect for such a scenario is not very high at this stage but would continue to improve as long as USD can hold above the 108.80 ‘key support’.