Extra upside remains well on the cards for USD/JPY in the short-term horizon, commented FX Strategists at UOB Group Quek Ser Leang and Peter Chia.

Key Quotes

24-hour view: “The strong surge in USD to 130.98 came as a surprise (we were expecting sideway-trading). While overbought, the rapid rise has scope to edge above 131.00. The major resistance at 131.35 is unlikely to come into the picture. Support is at 130.35 followed by 130.05.”

Next 1-3 weeks: “We have held a positive USD view since early last week. In our latest narrative from last Thursday (02 Jun, spot at 130.05), we highlighted that USD could continue to strengthen albeit at a slower pace. We indicated, “the next resistance is at 130.50 followed by 130.80”. Last Friday, USD cracked both 130.50 and 130.80 as it soared to 130.98. While further USD strength would not be surprising, overbought shorter-term conditions suggest that it may take a while before USD could move towards the next major resistance at 131.35. Overall, only a break of 129.45 (‘strong support’ level was at 129.00 last Friday) would indicate that the USD strength has run its course.”