A potential move in USD/JPY beyond the 139.00 barrier seems to have gathered steam as of late, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “We did not anticipate the advance in USD to a high of 138.69 (we were expecting USD to trade in a range). While there is room for USD to advance further, it remains to be seen if it has enough momentum to break clearly above the major resistance at 139.00 today. Support is at 138.10, followed by 137.65.”

Next 1-3 weeks: “Last Friday (22 May, spot at 138.40), we highlighted that ‘while we continue to expect USD to strengthen further, overbought short-term conditions could lead to a couple of days of consolidation before USD resumes its rally (albeit likely at a slower pace)’. Yesterday, USD rose to a high of 138.69. Short-term upward momentum appears to be building again and the odds of USD breaking clearly above 139.00 have increased. The next level to focus on is 139.60. On the downside, a breach of 137.30 (‘strong support’ previously at 136.80) would indicate that the USD strength that started early last week has ended.”