The bullish bias in USD/JPY remains well in place and faces further advance once 136.00 is cleared, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘trade in a choppy manner between 131.80 and 133.80’ last Friday. We did not expect the outsized surge as USD jumped to a high of 135.42. The rapid rise has scope to extend but deeply overbought conditions suggest that a sustained rise above 135.60 is unlikely (next resistance is at 136.00). On the downside, a breach of 134.00 (minor support is at 134.40) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “After USD plummeted to 131.48, we highlighted last Friday (17 Jun, spot at 132.60) that ‘the rapid improvement in downward momentum suggests the decline could extend to 130.50’. We did not anticipate the outsized jump as USD rallied by 2.09% (NY close of 134.96). The break of our ‘strong resistance’ at 134.80 has invalidated our view. The risk appears to be shifting back to the upside but USD has to close above 136.00 before further sustained advance is likely. The chance for USD to close above 136.00 would remain intact as long as it does not move below 133.50 (‘strong support’) level within these few days.”