In the opinion of UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, further upside momentum could still encourage USD/JPY to revisit the 135.50 zone in the short term.

Key Quotes

24-hour view: “We did not anticipate the strong rise in USD to 135.22 yesterday (we were expecting USD to trade sideways). Despite the strong advance, there has been no significant increase in upward momentum and USD is unlikely to strengthen much further. Today, USD is more likely to consolidate between 134.20 and 135.20.”

Next 1-3 weeks: “On Monday (20 Feb, spot at 134.35) we highlighted that USD could consolidate for a couple of days before heading higher to the next target at 135.50. While USD rose to a high of 135.22 yesterday, upward momentum has not increased by much. However, as long as 133.60 (‘strong support’ level was at 133.30 yesterday) is not breached, the USD strength that started in the middle of last week is still intact. Looking ahead, if the USD breaks decisively above 135.50, the next level to watch is 137.00.”