USD/JPY keeps targeting the 144.00 region – UOB

Further gains in USD/JPY are expected to challenge the 144.00 region sooner rather than later, according to UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: We highlighted last Friday that USD “is likely to strengthen further”, however, we held the view that “the next major resistance at 144.00 is highly unlikely to come into view.” We added, “In order to keep the momentum going, USD must stay above 142.35 (minor support is at 142.70).” In NY trade, USD dipped briefly to 142.74, surged to 143.91 and then pulled back. Severely overbought conditions combined with tentative signs of slowing momentum suggest USD could pullback further. However, any decline is unlikely to break below 142.75 (minor support is at 143.00). Resistance is at 143.65, followed by 144.00. The latter level is still unlikely to come into view. 

Next 1-3 weeks: Last Friday (23 Jun, spot at 143.10), we held the view that USD is likely to continue to rise and the next level to watch is 144.00. USD then rose to 143.91 and pulled back. There is no change in our view. However, short-term momentum has waned somewhat, but only a breach of 142.30 (‘strong support’ level previously at 141.60) would indicate the USD strength that started about 1-1/2 weeks ago has come to an end.