USD/JPY could extend the upside to 124.30 – UOB

In opinion of FX Strategists at UOB Group Quek Ser Leang and Peter Chia, the continuation of the buying pressure could motivate USD/JPY to retest the 124.30 region in the next weeks.

Key Quotes

24-hour view: “Our expectations for USD to ‘trade sideways’ were incorrect as it soared to 123.66 before extending its gains during early Asian hours. The rapid build-up in momentum is likely to lead to further USD strength to 124.30. The next resistance at 124.60 is not expected to come into the picture. Support is at 123.55 followed by 123.15.”

Next 1-3 weeks: “We have expected USD to consolidate and trade within a range of 121.00/124.00 since late last week. After trading in relatively quiet manner for a few days, USD soared to a high of 123.66 yesterday before extending its gains during Asian hours. Upward momentum is building and USD is likely to trade with an upward bias towards 124.30, possibly 124.60. Looking ahead, USD has to close above 124.60 before a move to last month’s high at 125.10 can be expected. On the downside, a breach of 121.00 (‘strong support’ level) would indicate that the build-up in momentum has fizzled out.”