Further upside could see 149.50 retested – UOB

The continuation of the upside momentum could push USD/JPY to the 149.50 zone in the next few weeks, according to UOB Group’s Markets Strategist Quek Ser Leang and Senior FX Strategist Peter Chia.

Key Quotes

24-hour view: We highlighted yesterday that USD “is likely to rise above 149.00 but is unlikely to reach 149.50.” We also highlighted that “there is another resistance level at 149.20.” Our view was not wrong, as USD rose to 149.19 before pulling back quickly. While there is no clear increase in momentum, the bias for today is tilted to the upside. However, any advance is still unlikely to reach 149.50. If USD breaks below 148.65 (minor support is at 148.85), it would mean that the current mild upward pressure has faded.

Next 1-3 weeks: Yesterday (26 Sep, spot at 148.95), we indicated that “upward momentum has improved further and USD could advance to 149.50.” There is no change in our view. Only a break of 148.10 (‘strong support’ level was at 147.80 yesterday) would indicate that the current upward pressure has faded. Looking ahead, if USD breaks above 149.50, the focus will shift to 150.00.