USD/JPY: Rally could take a breather near term – UOB

The upside momentum in USD/JPY could pause ahead of further uptrend, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘conditions are deeply overbought and USD is unlikely to strengthen much further’ and we expected USD to ‘trade sideways within a range of 118.45/119.10’. USD subsequently traded between 118.35 and 119.02. Further sideways appears likely, expected to be between 118.35 and 119.05.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (17 Mar, spot at 108.85). As highlighted, further USD strength is not ruled out but the recent rally may take a pause first. As long as 117.90 (no change in ‘strong support’ level) is not breached, there is room for USD to break clearly above 119.10. That said, the chance for USD to move to the next major resistance at 119.70 is not high for now.”