Further upside is likely in USD/JPY once the 142.25 level is cleared, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We indicated yesterday that “the strong USD rally is likely to extend even though a sustained rise above 124.25 is unlikely.” However, USD rose less than expected as it eked out a fresh high of 142.04. We continue to see chance for USD to rise above 142.25. Then next resistance at 142.70 is unlikely to come into view. Support is at 141.55, followed by 141.10. 

Next 1-3 weeks: After USD soared last Friday, we highlighted yesterday (19 Jun, spot at 141.85) that “momentum has increased considerably”. We added, “USD has to break and stay above another major resistance at 142.25 before further sustained rise is likely.” We continue to hold the same view. Looking ahead, the next level to watch above 142.25 is 143.00. On the downside, the ‘strong support’ level remains unchanged at 140.40. A breach of the ‘strong support’ indicates that USD is not advancing further.