Japanese Yen: Broad Range Holds as Bearish Momentum Builds Against US Dollar – UOB

USD/JPY stands at 158.50, according to United Overseas Bank’s (UOB) Quek Ser Leang. Persistent carry trades leave the Japanese Yen as the weakest G10 currency. The Dollar is expected to grind higher towards 158.80 intraday, but key resistance at 159.05 should remain beyond reach. Despite longer-term downside risks, UOB retains its expectation of range trading between 157.50 and 159.05 over 1–3 weeks.

159.05 cap holds as Dollar-Yen finds support

"24-HOUR VIEW: USD traded within a range of 157.67/158.33 last Friday and closed largely unchanged at 157.99 (+0.01%). When it was at 157.90 yesterday, we highlighted the following: “Despite range-trading and the largely unchanged close, downward momentum appears to be building. Today, we expect USD to edge lower and test 157.50.” We were incorrect, as after edging lower to 157.68, USD rose sharply to a high of 158.54. This time around, upward momentum appears to be building. Today, USD could edge higher to 158.80. The major resistance at 159.05 is unlikely to come into view. To sustain the momentum buildup, USD must hold above 158.15, with minor support at 158.30."

"1-3 WEEKS VIEW: In our most recent narrative from last Wednesday (14 Oct, spot at 158.35), we highlighted that USD “has likely moved into a range-trading phase between 157.50 and 159.05.” Since then, USD has traded within the range, and there is no change in our view."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)