FX Strategists at UOB Group do not rule out a move above the 109.75 level in USD/JPY the next weeks.

Key Quotes

24-hour view: “The sudden surge in USD was unexpected as it soared to a high of 109.48 before closing the day on a firm note at 109.27 (+0.29%). While overbought, the advance in USD has room to extend further even though 109.75 is a solid resistance and is unlikely to yield so easily. Support is at 109.05 followed by 108.85”.

Next 1-3 weeks: “USD soared to a high of 109.48 yesterday, the first time that it moved above the early August peak of 109.30. The price action was not surprising as we highlighted on Wednesday (06 Nov, spot at 109.15) that “USD could move above the early August peak near 109.30”. However, we indicated there is “another solid resistance at 109.75”. From here, USD could advance towards 109.75 even though the prospect for a sustained rise above this level is not that high for now. That said, as long as USD stays above 108.65 (‘strong support’ level previously at 108.45), the risk of a break of 109.75 cannot be ruled out (next resistance is at 110.15)”.