FX Strategists at UOB Group noted USD/JPY could extend the current upside momentum to levels past the 114.00 yardstick.

24-hour view: “We highlighted yesterday that ‘conditions are overbought but the impulsive momentum suggests that USD could strengthen further to 113.80’. While USD rose as expected but it only touched 113.78. Upward momentum is beginning to show tentative signs of slowing. This coupled with still overbought conditions suggests that USD is unlikely to strengthen much further. For today, USD is more likely to trade between 113.15 and 113.80.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (12 Oct, spot at 113.40). As highlighted, the impulsive surge suggests that further USD strength would not be surprising. The next resistance is at 114.20. The USD strength is deemed intact as long as it does not breach 112.65 (‘strong support’ level was at 112.40 yesterday).”

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