Japanese Yen: Losses seem capped against US Dollar – UOB

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note that USD/JPY traded on a firm footing in early Asian trade as upward momentum continued to build. While the near-term bias remains tilted to the upside, they believe the pair lacks sufficient momentum to reach the major resistance at 158.70. Over the next 1–3 weeks, UOB continues to expect USD/JPY to trade within a 156.35–158.70 range.

Dollar-Yen firm but constrained

"24-HOUR VIEW: USD fluctuated between 157.41 and 158.29 on Monday and closed largely unchanged at 157.90 (+0.04%). Yesterday, we indicated that “the price action does not provide any clear directional clues.” We also indicated that USD “could trade between 157.55 and 158.45.” USD then traded within a range of 157.75/158.24. USD closed at 158.10 (+0.13%), but it traded on a firm note in the early Asian session today. Upward momentum is building, and the bias is on the upside. However, USD does not appear to have sufficient momentum to reach the major resistance at 158.70. To sustain the upside bias, USD must hold above 157.90, with minor support at 158.10. "

"1-3 WEEKS VIEW: We continue to hold the same view as Monday (05 Oct, spot at 157.65). As highlighted, rather than continuing to pull back within the previously expected 156.00/158.70 range, USD “is likely to trade in a range between 156.35 and 158.70.” "

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