The recovery is now targeting the 121.50 level – UOB

The strong upward momentum could push the USD/JPY to the region of 121.50 in the coming weeks, as commented by FX strategists from UOB Group.

24 hour outlook: “We indicated yesterday that the rapidly improving upside momentum was likely to lead to further USD strength. We added that the next resistance was at 120.40. While our view on a stronger dollar was correct, we did not expect the rally to end.” will shoot to 121.03 before extending its gains after the end of the US session. Further USD strength not ruled outbut in view of deeply overbought conditions, a sustained rally above major resistance at 121.50 is unlikely. On the downside, a break of 120.30 (minor support is at 120.55) would indicate that the current rally is ready to take a breather.”

Next 1-3 weeks: “We turned positive on the USD about two weeks ago. As the USD was above our targets, in our latest narrative yesterday (March 22, pair at 120.00), we were of the view that it could continue to rise, albeit at a slower pace.However, the currency went beyond 120.40 resistance and spiked above 121.03.While it remains to be seen if it can sustain the current frenetic pace of advance, the risk is clearly for further dollar strength . The next resistance level is at 121.50 followed by 122.00. Only a break of 119.60 (‘strong support’ was at 118.90 yesterday) would indicate that the current strong bullish pressure has eased.”