USD/JPY: Dwindling bets for a test of 135.00 – UOB

A visit to the key up barrier at 135.00 in USD/JPY seems to have lost some momentum as of late, suggested FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for ‘further USD strength’ did not materialize as it dropped to 133.27 before rebounding to close little changed at 134.33 (+0.07%). Overbought conditions coupled with tentative signs of slowing momentum suggests that the bias for today is tilted to the downside. That said, any weakness is expected to face solid support at 133.20 (minor support is at 133.60). Resistance is at 134.55 followed by 134.80.”

Next 1-3 weeks: “Yesterday (09 Jun, spot at 134.35), we highlighted that the relentless rally could continue to extend. We indicated that the next resistance is at 135.00, a major level. USD subsequently dropped to 133.27 before rebounding to close little changed at 134.33 (+0.07%). Shorter-term upward momentum is beginning to wane and this coupled with overbought conditions has decreased the chance for USD to break above 135.00. That said, the USD strength that started early last week is deemed intact as long as 132.20 (no change in ‘strong support’ level from yesterday) is not breached.”