USD/JPY to test 152.25 before the risk of a pullback increase – UOB Group

There is scope for US Dollar (USD) to test 152.25 before the risk of a pullback increases. In the longer run, outlook is mixed; USD could trade between 150.00 and 153.00 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD might trade between 150.00 and 153.00 for now

24-HOUR VIEW: "Our view for USD to 'trade in a sideways range of 150.00/151.00' turned out to be incorrect, as USD soared and reached a high of 152.17. The sharp rise appears excessive, but there is scope for USD to test 152.25 before the risk of a pullback increases. We do not expect the major resistance at 153.00 to come into view. On the downside, if USD breaks below 151.10 (minor support is at 151.40), it would mean that USD is more likely to range-trade rather than testing 152.25."

1-3 WEEKS VIEW: "In our latest update from last Friday (17 Oct, spot at 150.15), we indicated that 'the odds of USD breaking clearly below 149.50 are increasing.' USD subsequently dropped to a low of 149.36 before rebounding strongly. Yesterday (21 Oct, spot at 150.55), we highlighted that 'downward momentum has slowed, but as long as the ‘strong resistance’ level at 151.35 is not breached, there is a chance for USD to retest the 149.35 level.' We did not expect USD to break above 151.35, as it soared to a high of 152.17. The recent sharp but short-lived swings have resulted in a mixed outlook, and USD could trade between 150.00 and 153.00 for now."