USD/JPY: A breakout of 141.00 seems closer – UOB

Extra gains could see USD/JPY advancing past the 141.00 hurdle sooner rather than later, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “Yesterday, we held the view that USD ‘could break above 141.00 but it is unlikely to threaten the next resistance at 141.55’. We indicated, ‘a breach of 140.00 suggests USD is not rising further’. However, USD did not break above 141.00 as it pulled back from 140.91 to 140.10 and then closed at 140.44 (-0.13%). Upward pressure has faded and the current movements are likely part of a consolidation range. Today, we expect USD to trade sideways between 139.70 and 140.70.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (29 May, spot at 140.85). As highlighted, the recent increased in momentum suggests USD could break 141.00. However, the solid long-term resistance at 142.00 might not break. Overall, only a breach of 139.30 (no change in ‘strong support’ level) would indicate that the USD strength that started two weeks ago has run its course.”