USD/JPY: Unabated rally now looks to 123.00 – UOB

In opinion of FX Strategists at UOB Group, the upside momentum could push USD/JPY to the 123.00 region in the short-term horizon.

Key Quotes

24-hour view: “The manner by which USD leaped to 122.40 came as a surprise (we were expecting USD to trade sideways). While deeply overbought, the rally has scope to advance to 122.60 first before the current upward pressure should ease. The next resistance at 123.00 is unlikely to come into the picture. Support is at 121.70 followed by 121.40.”

Next 1-3 weeks: “Two days ago (23 Mar, spot at 121.05), we highlighted that risk for USD ‘is still clearly on the upside’. We indicated that ‘the next resistance level of note is at 121.50 followed by 122.00’. USD cracked both resistance levels yesterday (24 Mar) as it jumped to a high of 122.40. The USD rally that started about three weeks ago (see annotations in the chart below) appears to have room to extend further. The next level to focus on is at 123.00. On the downside, a breach of 121.00 (‘strong support’ level was at 120.00 yesterday) would indicate that the USD rally is ready to take a breather.”