USD/JPY: Door open to 133.00? – UOB

Further upside in USD/JPY could reach the 133.00 region in the near term, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “While we expected USD to advance yesterday, we were of the view that ‘the major resistance at 131.35 is unlikely to come into the picture’. We did not expect the rapid upward acceleration that easily cracked 131.35 as USD rocketed to a high of 132.01. USD extended its advance during early Asian hours and further USD strength would not be surprising. The next resistance is at 132.60 followed by 133.00. The latter level is likely out of reach for today. Support is at 131.75 followed by 131.40.”

Next 1-3 weeks: “Yesterday (06 Jun, spot at 130.70), we were of the view that further USD strength would not be surprising but it may take a while before USD could move above 131.35. However, USD surged and cracked 131.35 before surging to 132.01. USD extended its advance during early Asian hours and solid upward momentum suggests USD could continue to strengthen towards 133.00. Overall, only a break of 130.80 (‘strong support’ level was at 129.45 yesterday) would indicate that the USD strength that started early last week (see annotations in the chart below) has run its course.”