USD/JPY: A test of 138.00 appears on the cards – UOB

In the opinion of FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang, USD/JPY looks poised to extend the uptrend beyond 138.00 sooner rather than later.

Key Quotes

24-hour view: “The strong surge in USD to a high of 137.75 yesterday appears to be overdone and USD is unlikely advance much further. For today, USD is more likely to trade sideways between 136.60 and 137.80.”

Next 1-3 weeks: “We turned neutral in USD last Tuesday (05 Jul, spot at 135.95) and we expected USD to trade between 134.75 and 137.00. After trading within the expected range for a few days, USD jumped to a high of 137.75 yesterday (11 Jul). The price actions have shifted the risk to the upside and USD could advance further to 138.00, as high as 138.50. The upside risk is intact as long as USD does not move below 136.00 (‘strong support’ level) within these few days.”