Further improvement in the sentiment could motivate USD/JPY to revisit the 133.75 level ahead of 134.75 in the short term, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: “USD lifted off last Friday and rocketed to a high of 131.21. USD extended its ascent in Asian trade today. While further USD gains are possible, the major resistance at 133.35 might not come into view today (next resistance is at 134.75). In order to keep the overbought momentum going, USD should not move below 131.10 (minor support is at 131.60).”

Next 1-3 weeks: “Our view from last Thursday (02 Feb, spot at 128.40) for USD to weaken to 127.20 was incorrect as it jumped above our ‘strong resistance’ level at 129.90. The outsized advance and the corresponding sharp increase in upward momentum suggest USD could rise further. The levels to watch are at 133.35 and 134.75. In order to keep the strong momentum going, USD must stay above the ‘strong support’ level, currently at 129.80.”