USD/JPY: Upside momentum seems to be losing traction – UOB

According to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang, the upward bias in USD/JPY seems to be fading.

Key Quotes

24-hour view: “We highlighted yesterday that ‘while USD is likely to trade with an upward bias, it is unlikely to break the major resistance at 134.40 today’. We added, “Support is at 133.20, followed by 132.70”. USD rose to 134.04 in Asian trade but in NY trade, it plummeted to a low of 132.72. Upward pressure has eased and the current movement is likely part of a consolidation phase. Today, we expect USD to trade in a range of 132.60/133.70.”

Next 1-3 weeks: “We have expected a stronger USD since the start of the week. After USD rose, we highlighted on Tuesday (11 Apr, spot at 133.30) that USD could consolidate for a couple of days before rising to 134.40. Yesterday (13 Apr), USD eked out a fresh high of 134.04 and then retreated. Upward momentum is beginning to fade and the odds of USD rising to 134.40 are diminishing. However, only a break of 132.20 (no change in ‘strong support’ level) would indicate that USD is not strengthening further.”