USD/JPY now faces the next up barrier at 129.30, commented FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “We highlighted yesterday that ‘solid upward momentum suggests USD could rise above 128.30’. We added, ‘the next resistance at 128.60 is likely out of reach for now’. The anticipated USD strength exceeded our expectations as USD surged to a high of 128.88. Upward momentum is still strong and USD could extend its advance to 129.30 (minor resistance is at 129.05). Support is at 128.50 followed by 128.30.”

Next 1-3 weeks: “Yesterday (31 May, spot at 128.00), we highlighted that the recent weak phase has ended and we held the view that the rebound in USD could extend to 128.60. Our view turned out to be correct even though we did expect rapid manner by which USD moved above 128.60 (USD rose to a high of 128.88). The price actions suggest further USD strength would not be surprising. The next resistance is at 129.30 followed by 129.80. Overall, only a break of 128.00 (‘strong support’ level was at 127.20 yesterday) would indicate that the rapid build-up in momentum has fizzled out.”