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USD/JPY could attempt a move to 109.00 and beyond in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “The abrupt lift-off in USD that sent it soaring to an overnight high of 108.76 came as a surprise. While the rally appears to be running ahead of itself, robust momentum suggests USD could edge above 109.00. That said, in view of the overbought conditions, the next resistance at 109.35 is unlikely to come into the picture for today. On the downside, 108.20 is likely strong enough to hold for today (minor support is at 108.40).”

Next 1-3 weeks: “We have expected USD to trade sideways within 107.00/108.00 for about a week (27 May, spot at 107.55). We indicated that only a daily closing out of the expected range would suggest the start of a more sustained movement in USD. However, we did not anticipate the sudden strong pick-up in momentum as USD blast above 108.000 and posted the largest 1-day advance since mid-March (108.66, +1.00%). The outlook for USD is positive and from here and USD could continue to advance towards the early April high near 109.35. On the downside, the ‘strong support’ level at 107.80 is likely strong enough to hold any pull-back, at least for the next few days.”