USD/JPY now looks to a test of 137.50 – UOB

The rally in USD/JPY could extend to the 137.50 region in the next few weeks, according to FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.

Key Quotes

24-hour view: “Our expectations for the ‘overbought rally in USD to extend’ did not materialize as it traded between 135.67 and 136.71. The movement is viewed as part of a consolidation and we expect USD to trade sideways for today, likely within a range of 135.50/136.60.”

Next 1-3 weeks: “There is no change in our view from yesterday (22 Jun, spot at 136.30). As highlighted, USD could rise further to 137.00, as high as 137.50. That said, overbought shorter-term conditions could lead to a couple of days of consolidation first. Overall, only a break of 135.00 (no change in ‘strong support’ level from yesterday) would indicate that the upside risk that started earlier this week has come to an end.”