UOB group FX strategists maintain bullish outlook USD / JPY and suggested a potential change to the measurement of 109.00 and above.
24-hour view: “Our expectation of a USD” slightly higher than 109.00 “did not materialize because it reached an overnight high of 108.98 before settling on a firm note ( NY close of 108.89, + 0.21%). While conditions remain overbought, the upward momentum seems to be strong enough to lead to a move above 109.00. That said, the next resistance at 109.35 is unlikely to come into play. Support is 108.60 followed by 108.40. “
Next week: “We expect the USD to trade sideways at 107.00 / 108.00 for approximately one week (May 27, spot at 107.55). We have indicated that only a daily close out of the expected range would suggest the start of a more sustained movement in the USD. However, we did not expect a sudden sharp recovery in momentum, with the USD surpassing 108,000 and posting the largest one-day gain since mid-March (108.66, + 1.00%). The outlook for the USD is positive and, from here on, the USD could continue to rise towards the April high near 109.35. On the downside, the level of “solid support” at 107.80 is probably strong enough to contain any setback, at least for the next few days. “