UOB group FX strategists suggest that USD / JPY must clear level 107.80 to allow additional gains.
24-hour view: “We estimated yesterday that the” weakened underlying tone suggests that the dollar is likely to trade in a lower range of 106.85 / 107.55 “. The USD was then traded between 106.72 and 107.27 before ending the day at 107.02 (-0.10%). While the bias is from here for the USD to drop, a dull momentum suggests that any weakness is unlikely to clearly move below the 106.60 support (the next support is 106.40). Resistance is at 107.10 but the strongest level is at 107.30. “
Next 1-3 weeks: “After the USD jumped to 107.76 on Monday, we pointed out on Tuesday (April 12, spot at 107.45) that the USD” must first cross 107.80 before the ‘we can expect further sustained growth.’ We added, ‘the prospect of such a scenario is quite high but in order to maintain the current momentum of ramp-up, the USD should not go back below the “strong support” level at 106.60 within a few days. “The USD has drifted down in the past two days and is currently approaching the level of 106.60. While price action braked the ramp-up, only a break of 106.60 would indicate that the prospect of a breakout of 107.80 has dissipated. Meanwhile, in order to revive the losing momentum, the USD must move and stay above 107.30 in those 1 to 2 days. “