USD/JPY: USD to test 152.45 before the risk of a pullback increases – UOB Group
|Scope for US Dollar (USD) to test 152.45 before the risk of a pullback increases. In the longer run, USD must break and hold above 152.45 before further advances can be expected, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.
Above 152.45 further advances can be expected
24-HOUR VIEW: “After USD rose sharply two days ago, we indicated yesterday that ‘while further USD strength appears likely, any advance is unlikely to breach the major resistance at 152.00.’ The anticipated advance exceeded our expectations as USD rose to 152.17. While the rapid rise appears to be excessive, there is scope for USD to test 152.45 before the risk of a pullback increases. Today, a sustained break above 152.45 seems unlikely. To keep the momentum going, USD must hold above 151.20 (minor support is at 151.50).”
1-3 WEEKS VIEW: “Last Thursday (05 Dec, spot at 150.35), we highlighted that the recent USD weakness ‘appears to have stabilised.’ We also highlighted that ‘the current price movements are likely the early stages of a range trading phase, probably between 148.65 and 152.00.’ Although USD broke above 152.00 and reached a high of 152.17 yesterday, the increase in momentum is not enough to indicate a sustained rise. USD must break and hold above 152.45 before further advances can be expected. The likelihood of USD breaking clearly above 152.45 will remain intact, provided that the ‘strong support’ level, currently at 150.45 is not breached in the next few days.”
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