USD/JPY: Might rise and test 148.75 – UOB Group
US Dollar (USD) could rise and test 148.75 against Japanese Yen (JPY); a break above this level is not ruled out, but USD is unlikely to threaten 149.20. In the longer run, USD is likely to trade in a range, probably between 147.20 and 149.20, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD is unlikely to threaten 149.20
24-HOUR VIEW: "Last Friday, USD dropped to a low of 146.71 and then rebounded. Yesterday, we stated that “while USD could rebound further, given that there has been no significant increase in momentum, any advance is likely to be part of a higher range of 147.20/148.25.” We were not wrong, as after dipping to a low of 147.33, USD rose and reached a high of 148.25. USD closed on a firm note at 148.14 (+0.28%). This time around, there has been an increase in upward momentum, and USD could rise and test the 148.75 resistance level today. A break above this level is not ruled out, but based on the current momentum, any further advance is unlikely to threaten the major resistance at 149.20. On the downside, if USD breaks below 147.65 (minor support is at 147.95), it would indicate that it is not rising further."
1-3 WEEKS VIEW: "Last Monday (04 Aug, spot at 147.25), we highlighted that 'the sharp drop in USD from last Friday has scope to extend, but any decline may not break below 145.80' After USD traded in a range for a few days, we indicated yesterday (11 Aug, spot at 147.70) that 'downward momentum is slowing, and the likelihood of USD dropping further is diminishing.' We added, 'a break above 148.20 (‘strong resistance’ level) would indicate that USD is likely to trade in a range rather than dropping further.' USD subsequently rose to a high of 148.25. As stated, the breach of our ‘strong resistance’ level indicates that USD is likely to trade in a range, probably between 147.20 and 149.20."