USD/JPY keeps the upside momentum well and sound – UOB

FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang suggest USD/JPY could advance to 141.50 on a close above 1405.50.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘the rapid improvement in momentum is likely to lead to further USD strength towards 140.00’. We highlighted that ‘a breach of this major resistance is not ruled out’ and ‘the next resistance is at 140.50’. Our view was not wrong as USD soared to a high of 140.22. Further USD strength is likely even though overbought conditions suggest USD may not be able to maintain a foothold above 140.50. On the downside, a breach of 139.35 (minor support is at 139.65) would indicate that the current upward pressure has eased.”

Next 1-3 weeks: “We turned positive USD on Monday (29 Aug, spot at 138.30). As USD soared, in our latest narrative from yesterday (01 Sep, spot at 139.35), we highlighted that the surge in momentum suggests that USD could advance to 140.00, 140.50. Our view was not wrong as USD cracked 140.00 during NY hours and rose to 140.22. Upward momentum remains strong and a break of 140.50 would shift the focus to 141.50. On the downside, a breach of 138.60 (‘strong support’ level was at 138.00 yesterday) would indicate that USD is unlikely to advance further.”