Japanese Yen: Range trading seen at 157.00-158.60 against US Dollar - UOB

UOB’s Quek Ser Leang and Lee Sue Ann observe USD/JPY broke above the prior 157.80 strong resistance, reaching 157.97, with negative divergence signalling slowing upside momentum and no imminent pullback. Intraday, they expect consolidation between 157.55 and 158.05. Over 1–3 weeks, they now see the pair in a range-trading phase, likely oscillating between 157.00 and 158.60 after the earlier steep decline failed to extend.

Japanese Yen settles into broader consolidation band

"24-HOUR VIEW: We expected USD to “trade in a range between 156.90 and 157.80” yesterday. Instead of trading in a range, USD rose to a high of 157.97. Negative divergence on momentum indicators suggests slowing upward momentum, and USD is unlikely to rise much further. However, there is no sign of an imminent pullback. Today, USD is likely to trade between 157.55 and 158.05."

"1-3 WEEKS VIEW: After the steep decline in USD last Thursday, we highlighted on Friday (23 Oct, spot at 156.60) that “the rapid increase in downward momentum suggests USD is likely to decline further.” We added, “support levels are 156.00 and 155.50.” After USD rebounded strongly from a low of 156.06, we highlighted yesterday (27 Oct, spot at 157.45) that “downward momentum is slowing, and a break above 157.80 (‘strong resistance’ level) would indicate that USD is likely to range-trade instead of heading lower.” USD subsequently broke 157.80 with a high of 157.97. USD has likely entered a range-trading phase, and for the time being, we expect it to trade between 157.00 and 158.60."

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