Japanese Yen: Further weakness could target 157.30 against US Dollar - UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/JPY surged above 156.30 to a high of 156.41, with momentum still modest but supportive of further gains. Intraday, the pair could test 156.50 while holding above support at 155.40. Over the next 1-3 weeks, they expect USD/JPY to edge higher toward 157.30, provided it stays above strong support at 154.80.

Dollar-Yen extends gains toward upper band

"24-HOUR VIEW: USD rose above 155.00 as we expected two days ago. When it was at 155.15 yesterday, we highlighted the following: “The increase in upward momentum remains modest, but today, USD could rise above 155.50. The next resistance at 156.30 is unlikely to come into view. On the downside, a break below 154.40 (minor support is at 154.80) would indicate that USD has likely entered a range-trading phase.” During the NY session, USD briefly dipped to 154.86 and then soared above 156.30, reaching a high of 156.41. Despite the sharp rise, momentum has not increased significantly. That said, USD could test 156.50 before levelling off. The next resistance at 157.30 is unlikely to come under threat. Support is at 155.70, followed by 155.40."

"1-3 WEEKS VIEW: In our most recent narrative from Tuesday (15 Sep, spot at 154.45), we highlighted that USD “could edge higher, but based on the prevailing momentum, any advance is likely to stay within a 153.30/156.30 range.” Yesterday, USD rose above 156.30 with a high of 156.41. Upward momentum is building, but it is not that strong for now. From here, USD could edge higher to 157.30. To sustain the momentum buildup, USD must hold above the ‘strong support’ level, now at 154.80."

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