USD/JPY: Major resistance at 158.00 is likely out of reach for now – UOB Group
|There is scope for the rally in US Dollar (USD) to test 157.55, the major resistance at 158.00 is likely out of reach for now. In the longer run, USD is expected to continue moving higher; the next level to watch is 158.00, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD is expected to continue moving higher
24-HOUR VIEW: "USD rose to a high of 155.73 on Tuesday. Yesterday, Wednesday, we highlighted the following: 'Despite the advance, upward momentum only increased modestly. Today, USD could edge higher, but the likelihood of it breaking above the major resistance at 156.00 is not high. Note that there is another resistance level at 155.75'. We did not expect the upward momentum to accelerate, as USD soared to a high of 157.18. The sharp rise appears excessive, but there is scope for the rally in USD to test 157.55. The next resistance at 158.00 is likely out of reach for now. Support is at 156.70, followed by 156.40."
1-3 WEEKS VIEW: "Two days ago (18 Nov, spot at 155.25), we indicated that 'the renewed upward momentum suggests there is a chance for USD to rise above 155.55'. We also highlighted that USD 'must close above this level before a move to 156.00 can be expected'. After USD subsequently rose and closed at 155.50, we highlighted yesterday that 'while we would have preferred a more decisive close above 155.55, the price action suggests that there is scope for USD to rise and test 156.00'. While our view of a higher USD was correct, we did not expect the manner in which USD surged yesterday, as it reached a high of 157.18. We continue to expect a higher USD, and the level to watch is 158.00. On the downside, the ‘strong support’ level is now at 155.60 instead of 154.70."
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