In opinion of FX Strategists at UOB Group, if USD/JPY breaches the 122.20 level it could signal the end of the end of the rally.

Key Quotes

24-hour view: “Yesterday, we expected ‘the rally in USD to extend to 123.30’. We did not expect the massive spike in volatility as USD rocketed to 125.10 before dropping quickly. Further volatile price actions appear likely and USD could trade within a relatively broad range of 122.60/124.60.”

Next 1-3 weeks: “Yesterday (28 Mar, spot at 122.80), we highlighted that the rally in USD could extend to 123.80. We did not expect the outsized surge that sent USD to a high of 125.10. Despite the subsequent sharp pullback from the high, the USD rally is still intact. That said, it is left to be seen if USD is able to maintain a foothold above 125.10 (next resistance is another major level at 125.85). Overall, only a breach of 122.20 (‘strong support’ level was at 121.00 yesterday) would indicate that the USD rally that started more than 2 weeks ago has come to an end.”