Daiwa says USD/JPY could rise to 111-112 levels by end-May

Commentary by Daiwa Securities' senior currency strategist Yukio Ishizuki

• Near-term bias strengthened after breaking above 109.65, the 50.0 retracement level
• Target now is 110.48, the 2 February high
• But not before a test of the 200-day MA @ 110.23
• Cost for speculators holding USD/JPY short positions will rise once the pair takes out the 200-day MA
• Given the pair has risen from 107 levels to 114 levels back in September to November, there is scope for the pair to reach 111-112 levels by end-May at the moment

Near-term bias in the pair is definitely bullish (as long as price stays above the 100 and 200-hour MAs), but the key level that the note missed out is the 110 psychological level. Expect offers to sit at the figure level as well, and it will be a key resistance level for the pair in the near-term.