Further upside momentum in USD/JPY could see 151.00 revisited in the next few weeks, note Markets Strategist Quek Ser Leang and Economist Lee Sue Ann at UOB Group.

Key Quotes

24-hour view: “Yesterday, we highlighted that ‘a break of 150.00 would not be surprising but USD is unlikely to be able to maintain a foothold above this level’. The anticipated USD strength was more resilient than expected as USD rose to 150.28 and closed at 150.14 (+0.17%). Further USD strength is not ruled out but overbought conditions suggest that a sustained rise above 150.60 is unlikely (next resistance is at 151.00). On the downside, a break of 149.70 (minor support is at 149.95) would indicate that the deeply overbought advance is ready to take a breather.”

Next 1-3 weeks: “We highlighted yesterday that ‘A break of 150.00 is likely to lead to further USD strength but it might take a while before the next resistance at 150.60 comes into view’. USD subsequently took out 150.00 and rose to a high of 150.28. We continue to expect USD strength, albeit at a slower pace and any gains could be relatively limited. The next resistance above 150.60 is at 151.00.  Overall, only a breach of 149.00 (‘strong support’ level was at 148.50 yesterday) would indicate that the USD strength that started more than a week ago has run its course.”