USD/JPY: Room for extra gains near term – UOB

Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group suggest USD/JPY could extend further its march north in the next few weeks.

Key Quotes

24-hour view: We noted yesterday that “the price action is likely part of a consolidation phase,” and we expected USD to trade in a range between 147.35 and 147.90. USD then traded between 147.49 and 147.95. Further consolidation appears likely, even though the slightly firm underlying tone suggests a higher range of 147.50/148.10. 

Next 1-3 weeks: Our update from two days ago (18 Sep, spot at 147.80) is still valid. As highlighted, upward momentum has increased slightly, and USD could edge higher to 148.40. At this stage, the likelihood of a sustained rise above this level is not high. On the downside, if USD breaks below 147.00 (‘strong support’ level previously at 146.85), it would indicate that the mild upward pressure has eased.