USD/JPY: Likely to test 153.00 before a sizeable pullback – UOB Group

There is a chance for US Dollar (USD) to test 153.00 again before a more sustained and sizeable pullback can be expected. In the longer run, further USD strength is likely; the level to watch is 153.80, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further USD strength is likely

24-HOUR VIEW: "USD surged two days ago. Yesterday, when USD was at 152.30, we indicated that 'while impulsive momentum is likely to outweigh the deeply overbought conditions, it remains to be seen if USD can break above 153.00 today.' USD subsequently rose to a high of 152.99 and then pulled back to close higher for the fifth straight day (152.68, +0.51%). While conditions remain deeply overbought, there is a chance for USD to test 153.00 again before a more sustained and sizeable pullback can be expected. Support is at 152.00, followed by 151.50."

1-3 WEEKS VIEW: "We turned positive on USD at the start of the week. Yesterday (07 Oct, spot at 150.35), we highlighted that 'further USD strength is likely, and the level to watch is 153.80.' We will continue to hold the same view as long as the ‘strong support’ at 150.90 (level was at 150.50 yesterday) holds."