USD/JPY: A chance to breach above the 161.90 level – UOB

The US Dollar (USD) could trade in a range between 160.80 and 161.90. Upward momentum is beginning to slow, but only a breach of 160.45 would suggest that USD is not strengthening further, UOB Group analysts Quek Ser Leang and Peter Chia note.  

Further upside is on the cards  

24-HOUR VIEW: “Our view for USD to trade in a sideways range of 161.20/161.80 was incorrect. Instead of trading sideways, USD plunged to 160.76 and then snapped back up. USD closed at 161.68 (+0.15%). The sharp but short-lived swings have resulted in a mixed outlook. Today, USD could trade in a range between 160.80 and 161.90.”

1-3 WEEKS VIEW: “We have expected a stronger USD since the middle of last month. In our most recent narrative from Tuesday (02 Jul, spot at 161.76), we indicated that if USD breaks above 162.00, the next level to watch is 163.00. We added, ‘only a breach of 160.45 (‘strong support’ level) would indicate that the USD strength has ended.’ Yesterday, USD fell briefly to 160.76 before rebounding. Upward momentum is beginning to slow, but only a breach of 160.45 (no change in level) would suggest that USD is not strengthening further.”