USD/JPY: A breakout of 141.00 appears on the table – UOB

The continuation of the upside momentum could push USD/JPY beyond the 141.00 mark in the short-term horizon, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Last Friday, we highlighted that USD could rise further to 140.50 before the risk of a pullback increases. We stated, ‘141.00 is highly unlikely to come into view today’. Our view was not wrong as USD rose to a high of 140.72 before closing on a firm note at 140.62 (+0.41%). USD continues to rise in early Asian trade, and while it could break above 141.00, it is unlikely to threaten the next resistance at 141.55. On the downside, a breach of 140.00 (minor support is at 140.35) suggests USD is not rising further.”

Next 1-3 weeks: “In our update from last Friday (26 May, spot at 140.00), we indicated the outlook for USD is still positive even though 141.00 may not come into view so soon. We did not expect USD to rise quickly to 140.72. USD extended its advance in early Asian trade today and the increased momentum indicates that a breach of 141.00 will not be surprising. The next level to focus on is 142.00; this level is a solid long-term resistance level and might not break (there is another minor resistance at 141.55). Overall, only a breach of 139.30 (‘strong support’ level was at 138.55 last Friday) would indicate that the USD strength that started two weeks ago has run its course.”