USD/JPY keeps targeting the 110.70 area – UOB

USD/JPY still appears well posed to advance to the 110.65/70 band in the next weeks, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “The roaring USD has finally started to show signs of fatigue above 110. After touching a high of 110.20 in early Tue trade, USD corrected to a low of 109.84 before closing at 109.97. With upside momentum substantially dented, our previous target of 110.45 looks stretched for now. For today, we look for sideways trade, between 109.50 and 110.20. Only a move below 109.20 would indicate that a near term top has been put in place.”

Next 1-3 weeks: “The relative ease of how USD took out its key resistance at 109.75 means that USD bulls remain fully in charge. While our oscillators are showing the most overbought conditions in over a year, it appears that there is still scope for a further rally to test May 2019’s highs at 110.67 before a corrective phase can begin. On the downside, expect support at 109.60 and only a move below 108.90 would indicate a short term top has been put in place.”