USD/JPY could extend the upside to 122.00 – UOB

FX Strategists at UOB Group believe USD/JPY could advance further and visit the 122.00 region in the next weeks.

Key Quotes

24-hour view: “We highlighted yesterday that ‘further USD strength is not ruled out but in view of the deeply overbought conditions, a sustained rise above the major resistance at 121.50 is unlikely’. USD subsequently rose to 121.40 before pulling back. Conditions remain overbought and upward momentum is showing tentative signs of easing and USD is unlikely to advance much further. For today, USD is more likely to trade sideways between 120.70 and 121.50.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (23 Mar, spot at 121.05). As highlighted, while it is left to be seen if USD can maintain the current frenetic pace of advance, the risk is clearly for further USD strength. The next resistance level of note is at 121.50 followed by 122.00. On the downside, a breach of 120.00 (‘strong support’ level was at 119.60 yesterday) would indicate that the upward pressure that started two weeks ago has eased.