According to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, USD/JPY could retest 126.30 in case 126.90 is cleared.

Key Quotes

24-hour view: “USD traded between 127.51 and 128.86 yesterday before closing at 128.12 (-0.34%). USD traded on a weak note during early Asian hours and the bias for today is on the downside. That said, any weakness is expected to face solid support at 126.90. The next support at 126.30 is unlikely to come into the picture. Resistance is at 127.90 followed by 128.40.”

Next 1-3 weeks: “We have held the same view since last Thursday (21 Apr, spot at 128.20) where USD is likely to consolidate and trade within a range of 126.90/129.40. While there is no change in our view, shorter-term downward momentum is beginning to build and the risk a deeper pullback has increased. From here, a clear break of 126.90 could lead to a pullback to 126.30. At this stage, the chance for a clear break of 126.90 is not high but it would remain intact as long as USD does not move above 128.80 (‘strong resistance’ level) within these 1 to 2 days.”