USD/JPY now looks at a potential test of 148.00 – UOB
There is still scope for USD/JPY to visit the 148.00 region in the short-term horizon, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: While we expected USD to move higher yesterday, we were of the view that it “is unlikely to break the major resistance at 147.20.” Not only did USD break above 147.20, but it also surged further and closed at a 10-month high of 147.71 (+0.85%). Solid upward momentum suggests continuing USD strength. In view of the severely overbought conditions, it seems unlikely USD can reach 149.00 today (there is another resistance at 148.30). In order to keep the momentum going, USD must stay above 147.00 (minor support is at 147.30).
Next 1-3 weeks: After USD pulled back from 147.36, we highlighted last Thursday (30 Aug, spot at 146.00) that it “is likely to trade in a range between 144.50 and 147.20.” USD then dropped slightly below 144.50 and touched 144.43 before rebounding. Yesterday, USD lifted off and blasted to a high of 147.80. The price actions suggest USD is likely to rise further, probably to 148.00. In order to maintain the rapid buildup in momentum, USD must stay above 146.45.
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