USD/JPY: The major resistance at 145.50 is likely out of reach – UOB Group
|Strong momentum suggests further US Dollar (USD) strength; the major resistance at 145.50 is likely out of reach. In the longer run, sharp advance reinforces view that USD could recover further to 145.50, UOB Group FX strategists Quek Ser Leang and Peter Chia note.
USD can recover further to 145.50
24-HOUR VIEW: “Our view for USD to trade in a 141.50/143.80 range last Friday was incorrect. USD dipped to a low of 141.72 and then lifted off, surging to a high of 144.49. While the rally is reaching overbought levels, strong momentum suggests further USD strength. However, any further advance is unlikely to reach the major resistance at 145.50 (there is another resistance level at 144.80). To keep the momentum going, USD must remain above 143.10 with minor support at 143.60.”
1-3 WEEKS VIEW: “Last Thursday (19 Sep), when USD was trading at 143.00, we indicated that ‘if USD can break clearly above 144.00, it could trigger a stronger recovery towards 145.50.’ We added, ‘the likelihood of USD breaking clearly above 144.00 will remain intact, provided that the ‘strong support’ level at 141.00 is not breached.’ On Friday, USD broke clearly above 144.00, reaching a high of 144.49. The sharp advance reinforces our view that USD could recover further to 145.50. On the downside, the ‘strong support’ level has moved higher to 141.90 from 141.00.”
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