USD/JPY recovery could test 112.20 – UOB

USD/JPY could attempt a test of the 112.20 area, suggested FX Strategists at UOB Group.

Key Quotes

“While USD broke above 111.50 as expected, the subsequent sharp and rapid decline from a high of 111.57 came as a surprise. The down-move appears to have room to extend lower towards 110.35/40 but a break below the major 110.00 support is not expected”.

“USD hit a high of 111.57 yesterday before dropping back sharply. Despite the pullback, the undertone is still positive and as long as the key 110.00 support is intact, there is still scope for a move higher towards 112.20. At this stage, a clear break above this level is not expected”.