USD/JPY: Bulls may try to test the 149.50 resistance – UOB Group

The US Dollar (USD) weakness has stabilised; there is no clear directional bias, and it could trade in a broad range of 146.00/152.00, UOB Group Quek Ser Leang and Lee Sue Ann note.

USD may try to reach 149.50 near term

24-HOUR VIEW: “Our view for USD to trade in a range yesterday was incorrect, as it surged during NY trading, closing sharply higher by 1.33% (149.27). After the sharp and swift rise, conditions are severely overbought. However, barring a breach of 148.20 (minor support is at 148.60), USD could rise above 149.50 before levelling off. The next resistance at 150.00 is unlikely to come under threat.”

1-3 WEEKS VIEW: “Our most recent narrative was from Monday (12 Aug, spot at 146.90), wherein ‘downward momentum is beginning to wane, and a breach of 148.30 would mean that the recent weakness in USD has stabilised.’ After trading sideways for a few days, USD surged yesterday and broke above 148.30. We view the current price movements as part of a range trading phase. In light of the recent high volatility, USD could trade in a broad range of 146.00/152.00, indicating a period of market indecision. In other words, there is no clear directional bias for now.”