The continuation of the upside bias could encourage USD/JPY to retest the 138.20 zone in the next few weeks, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “While we expected USD to rise further yesterday, we were of the view that ‘138.20 could be out of reach’. USD subsequently rose to 137.91, dropped to 136.46 before rebounding to end the day at 137.34 (+0.15%). The price actions are likely part of a consolidation phase. Today, USD is likely to trade in a range, expected to be between 136.50 and 137.55.”

Next 1-3 weeks: “Yesterday (08 Mar, spot at 137.30), we highlighted that the surge in momentum from Tuesday is expected to lead to further USD strength, likely towards 138.20. There is no change in our view. Only a breach of 136.20 (no change in ‘strong support’ level) would indicate that USD is not strengthening further.”