Further gains could motivate USD/JPY to revisit the 143.00 region in the next few weeks according to Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: While we expected USD to strengthen last Friday, we were of the view that “it is unlikely to threaten the major resistance at 141.00.” Not only did USD break above 141.00, it also jumped to a high of 141.95. While further USD strength is not ruled out, severely overbought conditions suggest the major resistance at 143.00 is likely out of reach today (there is another resistance at 142.50). In order to keep the strong momentum going, USD must stay above 140.95 (minor support is at 141.30). 

Next 1-3 weeks: Our most recent narrative was from last Thursday (19 Jul, spot at 139.55) wherein the recent USD weakness had stabilized. We expected USD to trade in a range between 138.00 and 141.00. The strong surge on Friday that sent USD to a high of 141.95 came a surprise. The rapid increase in momentum is likely to lead to USD rising to 143.00. In order to keep the momentum going, USD must stay above 140.00 (‘strong support’ level).