The rally in USD/JPY looks unabated and could visit the 129.50/130.00 region in the near term, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “While we expected USD to strengthen yesterday, we were of the view that ‘127.80 is likely out of reach’. In other words, we underestimated USD strength as it jumped by a whopping 1.52% (NY close of 128.90). USD extended its advance after NY close and further USD strength is not ruled out. Only a breach of 1.28.30 (minor support 128.60) would indicate that the current strong upward pressure has eased. On the upside, resistance is at 129.50 followed by the major level of 130.00.”

Next 1-3 weeks: “We highlighted yesterday (19 Apr, spot at 127.10) that further USD strength appears likely and the next levels to watch are at 127.50 and 128.00. We did not expect the subsequent sharp rally as USD eclipsed both 127.50 and 128.00 and rocketed to 128.97. USD extended its advance during early Asian hours and there is no end in sight to the current relentless rally. Next resistance levels of note are at 129.50 and 130.00. Overall, only a breach of 127.70 (‘strong support’ level was at 126.10 yesterday) would indicate that the rally in USD is ready to take a breather.”