USD/JPY seen testing 114.00 on a close above 113.50 – UOB

FX Strategists at UOB Group remain neutral on the pair and expect it to re-visit the 114.00 area on a close above 113.50.

Key Quotes

24-hour view: “USD is currently holding below the strong 113.50 resistance (overnight high of 113.49). While upward momentum is patchy at best, a break above 113.50 would not be surprising but at this stage, we do not expect a sustained up-move (next resistance is at 113.80 followed closely by another strong level at 114.00). Only a move back below 113.05 (minor support at 113.20) would indicate that the current mild upward pressure has eased”.

Next 1-3 weeks: “USD tested the top of our expected 112.00/113.50 consolidation range as it touched an overnight high of 113.49. As highlighted last Friday, a NY closing above 113.50 would suggest USD is ready to challenge 114.00. This scenario would not be surprising unless USD were to move back below 112.80 within these 1 to 2 days”.