USD/JPY: Still scope for a move above 141.50 – UOB

There still seems to be room for further upside in USD/JPY to the mid-141.00s, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: Yesterday, we expected USD to trade with an upward bias but we held the view that it “is unlikely to break 141.00”. We did not anticipate the elevated volatility as USD surged to 141.50 and then sold off sharply to a low 0f 139.93. The rapid loss in momentum suggests USD is unlikely to advance further. Today, USD is more likely to trade in a range of 139.50 and 140.70. 

Next 1-3 weeks: We highlighted yesterday that “upward momentum appears to be building”. We added, “for USD to advance in a sustained manner, it must break clearly above 141.00”. While USD surged to a high of 141.50, it plummeted from the high. The price actions did not result in any increase in momentum. However, as long as 139.30 (no change in ‘strong support level) is not breached, there is a slim chance for USD to break above 141.50 (this level is a solid resistance now).