Further upside in USD/JPY could reach the 138.00 area and beyond in the short term, commented FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “We expected USD to ‘trade between 136.50 and 137.50’ yesterday. Our expectations were incorrect as USD soared to a fresh high of 137.86 before closing on a firm note at 137.42 (+0.41%). Despite the advance, upward momentum has not improved by much. That said, USD could edge higher but a sustained rise above 1.38.00 is unlikely for today (next resistance is at 138.50). Support is at 137.30 followed by 137.00.”

Next 1-3 weeks: “There is no change in our view from two days (12 Jul, spot at 137.20). As highlighted, the risk for USD has shifted to the upside and USD could advance further to 138.00, as high as 138.50. All in, only a break of 136.30 (no change in ‘strong support’ level from yesterday) would invalidate our view for a higher USD.”