USD/JPY sticks to the neutral stance near term – UOB

In view of FX Strategists at UOB Group, spot remains neutral for the time being, likely to gravitate between 113.80 and 114.50.

Key Quotes

24-hour view: “Instead of ‘testing’ the 114.10 resistance, USD took out this level without much difficulty and hit a high of 114.27. The strong daily closing suggests further USD strength even though 114.50 is a major level and is expected to offer solid resistance (next resistance is at 114.85). Support is at 113.90 but the stronger level is near yesterday’s low at 113.60”.

“We shifted from a bullish to neutral stance yesterday and the subsequent strong rebound from a low of 112.95 came as a surprise. Despite the strong recovery, we continue to hold the same view even though USD is expected trade at a higher 113.00/114.50 range (instead of 112.40/113.85 expected previously). Looking further ahead, USD has to break clearly above 114.50 to indicate the start of a fresh bullish phase”.