Further upside to the area above 133.00 in USD/JPY seems to have lost traction for the time being, comment UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We did not anticipate the sharp drop in USD to 130.46 yesterday (we were expecting USD to trade in a range). The rapid drop appears to be overdone and USD is unlikely to weaken much further. Today, USD is more likely to trade between 130.20 and 132.20.”

Next 1-3 weeks: “Our latest narrative was from Monday (06 Feb, spot at 132.30) where the outsized advance in USD last Friday and the corresponding sharp increase in upward momentum suggest it could rise further. We indicated, the levels to watch are at 133.35 and 134.75. While USD subsequently soared to a high of 132.90, it dropped sharply yesterday and closed lower by 1.21% (NY close of 131.05). The price actions suggest the prospect of USD rising to 133.35 has decreased. However, only a breach of 130.20 (no change in ‘strong support’ level) would indicate that USD is not advancing further.”