UOB Group’s FX Strategists remain of the view that USD/JPY still targets the 115.00 level in the near term.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘while USD moved above 114.55 during early Asian hours, upward momentum is not that strong and the next major resistance at 115.00 is unlikely to come under threat’. USD subsequently eased off to 114.06 before settling little changed at 114.26 (-0.09%). Upward pressure has eased and the current movement is viewed as part of a consolidation. In other words, USD is likely to trade sideways for today, expected to be between 114.00 and 114.55.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (20 Oct, spot at 114.50). As highlighted, the focus now is at 115.00 even though deeply overbought conditions suggest that the odds for a sustained advance above 115.00 are not high. On the downside, a breach of 113.75 (no change in ‘strong support’ level from yesterday) would indicate that the USD strength that started about 2 weeks ago (see annotations in the chart below) has come to an end.”