According to Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia at UOB Group, the upside momentum in USD/JPY remains focused on the 134.80 zone.

Key Quotes

24-hour view: “While we expected USD to strengthen further yesterday, we indicated that ‘in view of the overbought conditions, the major resistance level at 134.80 could be out of reach today’. USD strengthened in line with our expectations and it did not reach 134.80 (high of 134.57). Despite the advance, upward momentum appears to be fading and USD is unlikely to rise much further. Today, we expect USD to trade sideways, likely between 133.80 and 134.80. In other words, a clear break above 134.80 is unlikely.”

Next 1-3 weeks: “Our view from yesterday (17 Apr, spot at 133.80) still stands. As highlighted, while it is too early to expect the start of a sustained advance in USD, it is likely to trade with an upward bias to 134.80. Looking ahead, it has to break clearly above this level before further gains can be expected. The next resistance above 134.80 is at 135.50. Overall, only a breach of 133.00 (‘strong support’ level was at 132.70 yesterday) would suggest that the upward bias has eased.”