USD/JPY: Further gains likely above 151.30 – UOB

Extra upside in USD/JPY needs to clear the 151.30 zone in the near term, note UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: We expected further sideways trading yesterday, but we indicated that “the underlying tone has firmed somewhat, and this suggests a higher range of 149.50/150.40.” However, USD rose to a high of 150.68. While upward momentum has not increased much, there is room for USD to test the strong resistance at 150.80 before levelling off. A sustained rise above this level is unlikely. Support is at 150.10, followed by 149.85. 

Next 1-3 weeks: Our most recent narrative was from Monday (06 Nov, spot at 149.65), wherein USD appears to have entered a range-trading phase, and it is likely to trade between 148.80 and 150.80 for now. Yesterday, USD rose to a high of 150.68. Despite the advance, there is no significant increase in upward momentum. That said, USD could rise above 150.80, but it has to break clearly above 151.30 before a sustained advance is likely. The likelihood for USD to break clearly above 151.30 is low for now.