USD/JPY bullish on a close above 114.50 – UOB

USD/JPY should close above 114.50 in order to shift the current neutral bias to bullish, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “USD touched a high of 114.42 before easing off quickly. While indicators are showing mixed signals, USD is expected to grind higher towards the major 114.50 resistance. At this stage, a sustained move above this level seems unlikely (next resistance is at 114.85). On the downside, last Friday’s low near 113.65 is acting as a rather strong support (minor support is at 113.90)”.

Next 1-3 weeks: “USD ended the week on a strong note last Friday and this suggests an increasing risk of a sustained move above the critical 114.50 level. As highlighted in recent updates, a break of this key resistance could lead to a rapid rise in USD. The next significant resistance above this level is at 115.50, the high seen in March. This scenario would not be surprising as long as 113.30 is not breached in the coming days (113.65 is already a strong shorter-term support)”.