USD/JPY tough resistance lies at 112.10 – UOB

In opinion of FX Strategists at UOB Group, the pair’s upside should find a strong resistance above the 112.00 handle.

Key Quotes

“Expectation for sideway trading was wrong as USD surged strongly during NY session to hit a high of 111.60 (before extending its gain earlier this morning). Upward momentum has picked up strongly and further USD strength is expected. That said, the next level at 112.10 is a strong resistance and is unlikely to yield so easily (minor resistance at 111.95)”.

“While we held the view that the recent USD strength has room to extend higher to 111.70, the rapid pace of the rally was unexpected. The week-long neutral phase has shifted to bullish and from here, we are anticipating a break above 112.10 (minor peak in late-May) for a move to 112.80. Current level of 111.65 could be used as an entry level with stop-loss at 110.85”.