USD/JPY a test of 113.50 loses momentum – UOB

FX Strategists at UOB Group noted a potential test of the mid-113.00s seems to have run out of steam as of late.

Key Quotes

“We indicated yesterday that “a move to test the major 113.10 resistance seems likely”. However, USD only managed to touch a high of 113.04 before dropping quickly. A short-term top is likely in place and the current movement is viewed as the start of a consolidation phase”.

“While we noted yesterday that a break of the revised target at 112.90 would shift the focus to 113.50, the rapid pull-back from a high of 113.04 came as a surprise. Upward momentum has been dented and the weak daily closing suggests diminished odds for extension to 113.50. However, only a break below 112.20 would indicate that the current bullish USD phase that started last week has ended”.