USD/JPY: Any advance may not reach 157.20 – UOB Group
|Further US Dollar (USD) strength is not ruled out; any advance may not reach 157.20. In the longer run, USD must close above 157.20 before a move to 157.90 can be expected, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD must close above 157.20 before moving to 157.90
24-HOUR VIEW: "When USD was at 155.85 in the early Asian session yesterday, we were of the view that it 'could edge higher'. However, we noted that 'momentum does not appear to be strong enough to break clearly above 156.20'. We did not expect upward momentum to accelerate so quickly, as USD soared to a high of 156.95. While USD strength is not ruled out, conditions are deeply overbought, and USD may not reach 157.20 today. To keep the momentum going, USD must hold above 156.30, with minor support at 156.55."
1-3 WEEKS VIEW: "In our most recent narrative from last Thursday (04 Dec, spot at 155.20), we highlighted that 'for a sustained decline, USD must first close below 154.65'. While USD dropped below 154.65 a couple of times, it did not close below this level. Yesterday, USD soared above our ‘strong resistance’ level at 156.20 and then closed at 156.86. The tentative downward pressure has faded. There has been a rapid increase in upward momentum, but this time around, USD must close above 157.20 before a move to 157.90 can be expected. The likelihood of USD closing above 157.20 is expected to increase in the next few days as long as the ‘strong support’ level, now at 155.80, is not breached."
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