In light of the ongoing uptrend, USD/JPY could now test 119.70 in the short-term horizon, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We expected USD to ‘trade sideways between 118.35 and 119.05’ last Friday. We did not expect the strong rise to 119.39. While the rapid advance appears to be running ahead of itself, there is room for USD to test 119.45 first before easing off. The major resistance at 119.70 is unlikely to come into the picture for now. Support is at 119.00 followed by 118.80.”

Next 1-3 weeks: “Last Thursday (17 Mar, spot at 108.85), we highlighted that further USD strength is not ruled out but the recent rally may take a pause first. We added, the next resistance is at 119.70. USD subsequently traded sideways before rising to 119.39 on Friday. While upward momentum has not improved by all that much, the chance for USD to rise to 119.70 has increased. On the downside, a breach of 118.30 (‘strong support’ level was at 117.90 last Friday) would indicate that the current upward pressure has eased.”