USD/JPY could now enter a consolidation phase before a possible advance to 135.50as suggested by economist Lee Sue Ann and UOB Group Market Strategist Quek Ser Leang.
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24 hour view: “Last Friday, we highlighted that ‘the bias for USD/JPY remains bullish’, but we were of the opinion that ‘any advance is unlikely to break the main resistance at 135.00 today'”. Our view that USD/JPY would strengthen was correct. , although it broke above 135.00 (135.04 high) before pulling back sharply.The pullback amid overbought conditions suggests that USD/JPY has entered a consolidation phase.Today, we expect USD/JPY to trade sideways, probably within a range of 133.80/134.80″.
Next 1-3 weeks: “Last Wednesday (Feb 15, USD/JPY at 132.90) we went for the USD. Given the rise in the USD, in our last analysis on Thursday (Feb 16, USD/JPY at 133.85), we indicated that ” bullish momentum has further improved and USD/JPY is likely to continue to advance.” We noted that “the next level to watch is 135.00, followed by 135.50.” Our target level of 135.00 was met as USD/JPY reached a high of 135.04 on Friday, from here short-term overbought conditions could lead to a couple of days of consolidation as long as the 133.10 level is not broken (“strong support” was at 132.80 on Friday past), there is still a chance for USD/JPY to rally to the next target at 135.50.”
Source: Fx Street
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