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- USD/JPY: Sustained gains likely above 142.25 – UOB
USD/JPY: Sustained gains likely above 142.25 – UOB
USD/JPY needs to clear 142.25 to open the door to more sustained gains in the near term, note UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
Key Quotes
24-hour view: We did not anticipate the volatile trade last Friday as after dropping to a low of 139.83, USD lifted off and blew past the major resistance level at 141.50 (high has been 141.91). While overbought, the strong USD rally is likely to extend even though a sustained rise above the next major resistance at 142.25 is unlikely today (next resistance is at 143.00). In order to keep the strong momentum going, USD must stay above 141.15 (minor support is at 141.45).
Next 1-3 weeks: After USD rose to 141.50 and pulled back sharply, we indicated last Friday that “there is no increase in upward momentum.” We added, “However, as long as 139.30 is not breached, there is a slim chance for USD to break above 141.50.” That said, we did not expect the manner in which USD lifted off and rocketed to a high of 141.91 in NY trade. Upward momentum has increased considerably, but USD must break and stay above another major resistance at 142.25 before further sustained rise is likely. Looking ahead, the next level to watch above 142.25 is 143.00. On the downside, the ‘strong support’ level has moved higher to 140.40 from 139.30.
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