According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, extra gains in USD/JPY target the 137.90 level in the near term.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the rapid rise appears to be overdone and USD is unlikely to advance much further’ and we expected USD to trade in a range between 135.50 and 136.65. Our view of range trading was not wrong even though USD traded within a narrower range than expected (135.90/136.55). Further range trading appears likely, expected to be within a range of 135.80/136.60.”

Next 1-3 weeks: “We continue to hold the same view as yesterday (27 Feb, spot at 136.30). As highlighted, after the strong rise late last week, upward momentum has been boosted and this will likely lead to further USD strength. The next resistance level to watch is at 137.90. That said, overbought short-term conditions could lead to 1-2 day of consolidation first. On the downside, a breach of 135.00 (no change in ‘strong support’ level) would indicate that the USD strength that started in the middle of the month has run its course.”